German chemicals group BASF has agreed to buy the global polyamide business of Belgian rival Solvay for 1.6 billion euros (1.42 billion pounds) excluding debt.
BASF said on Tuesday the acquisition would complement its engineering plastics portfolio and enhance its access to key growth markets in Asia and South America.
For Solvay, the sale of its polyamide business means a further step in its strategy to divest its high-volume product range and focus on specific applications in aerospace and the oil and gas industry where it can achieve higher margins.
But Solvay said the sale would reduce group core profit growth this year.
The deal is expected to close in the third quarter of 2018, following regulatory approvals and the consent of a joint venture partner, which both companies said they expected.
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Solvay’s polymers business made sales of 1.32 billion euros last year and earnings before interest, tax, depreciation and amortisation (EBITDA) of around 200 million. It has about 2,400 employees.
BASF is also the world’s third-largest maker of crop chemicals and has been criticised by some investors for sitting on the sidelines of a flurry of mergers in that area.
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