Germany’s Evonik expects the sale of its methacrylate business to US firm Advent International to be completed by 31 July, a source from the company confirmed on Tuesday.
This follows approvals from the European Commission earlier in the month for the €3bn sale to the private equity fund.
The transaction includes the Methacrylates, Acrylic Products and CyPlus business lines, as well as some methacrylate resins activities.
The methacrylates business has 18 production sites and 3,900 employees worldwide.
It generated an average annual earnings before interest, taxes, depreciation and amortisation (EBITDA) of about €350m and sales of about €1.8bn/year in 2016-2018 and similar levels are expected for 2019.
There had been some concerns in the wider market over the sale, with MMA prices on a downward cycle for the last 14 months.
Evonik has contacted its customers to confirm the existing contracts will be assigned to the new company.
Buyers said they are expecting “business as usual” after the sale is completed.
According to some, the deal’s completion was good news after the uncertainty caused by a transaction which, for its magnitude, could affect the market’s dynamics.
The new company has not been named yet.
“We are not expecting any major changes to the current dynamics, they will fulfil current agreements,” said one trader.
“The sale is going through, which puts my mind at ease,” said one methyl methacrylate (MMA) buyer.
Source: ICIS News
The separation is expected to be completed by early Q3, following the receipt of all relevant approvals, including final Board approval. Nouryon intends to reduce its own debt with proceeds received from a planned external financing by Nobian.
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As part of the EU’s Single-Use Plastic Directive (SUPD), it will become mandatory for caps and lids to remain attached to all beverage containers up to three liters in capacity from 2024.
