German chemicals group BASF has asked the two remaining private-equity suitors of its 3 billion euro ($3.3 billion) construction chemicals unit for final bids by Friday, three people close to the matter said.
A consortium comprising buyout groups Cinven and Bain is expected to table an offer, as is rival investor Lone Star, which is bidding alone, the three people said on Thursday.
The sale has been long and drawn out as BASF put the construction chemicals business on the block a year ago to focus on more profitable operations.
The company declined to comment on Thursday. Cinven and Lone Star also would not comment, while Bain had no immediate comment.
BASF’s CEO Martin Brudermueller said last month he expects the signing of a deal before the end of the year.
“We received confirmatory bids and are now progressing with a smaller number of interested parties,” he said at the time.
The chemicals giant had initially hoped to sell the unit to the world’s largest cement maker LafargeHolcim, but was unable to hammer out a deal.
Cinven owns smaller French peer Chryso and aims to fold the business into the BASF unit, if its bid prevails, the sources said.
Bain owns British building materials distributor MKM, while Lone Star has German building materials maker Xella in its portfolio.
Lone Star had previously walked away from the bidding but was invited back to the negotiating table. Still, the Cinven-Bain consortium is seen as the frontrunner in the final round, the sources said.
BASF’s construction chemicals unit is the world’s largest maker of additives for concrete. It also offers a range of substances including concrete repair fillers, grouts and sealants under a business dubbed Construction Systems, where BASF is the No. 4 player globally.
Analysts have said that BASF never managed to reconcile the construction chemicals unit’s dependence on small to mid-size builders with BASF’s focus on large industrial customers.
BASF purchased the construction chemicals business – which competes with Standard Industries, GCP Applied Technologies , Mapei, RPM Inc and Sika – from Degussa in 2006 for 2.7 billion euros including debt.
($1 = 0.9033 euro)
By Arno Schuetze and Patricia Weiss
France has launched an offshore green hydrogen production platform at the country’s Port of Saint-Nazaire this week, along with its first offshore wind farm. The hydrogen plant, which its operators say is the world’s first facility of its type, coincides with the launch of another “first of its kind” facility in Sweden dedicated to storing hydrogen in an underground lined rock cavern (LRC).
The project sets up the Hydrogen Valley in Rome, the first industrial-scale technological hub for the development of the national supply chain for the production, transport, storage and use of hydrogen for the decarbonization of industrial processes and for sustainable mobility.
At first glance, hydrogen seems to be the perfect solution to our energy needs. It doesn’t produce any carbon dioxide when used. It can store energy for long periods of time. It doesn’t leave behind hazardous waste materials, like nuclear does. And it doesn’t require large swathes of land to be flooded, like hydroelectricity. Seems too good to be true. So…what’s the catch?