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Sika Could Acquire BASF Construction Segment

Friday, March 1, 2019

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Swiss chemicals company Sika is interested in buying a portion of BASF’s construction chemicals business, which will reportedly be up for sale this month.

What’s Going On?

Reuters reported early last month that BASF had hired Goldman Sachs to help divest its $3 billion Construction Chemicals business.

BASF reportedly first spoke of its intent to auction off or merge the unit in October 2018, and told Reuters that the first information packages are expected to be sent out to prospective bidders this month, and that first-round offers would likely be due before summer break.

Sika

Swiss chemicals company Sika announced that it is interested in buying a portion of BASF’s construction chemicals business, which will reportedly be up for sale this month.

“We are still at an early stage of the process,” a BASF spokesperson said.

The company said in October that the unit was falling short of profitability targets, and in its most recent financial report in February, reported a decline in income from operations and attributed that to the chemicals segment, which it says accounted for two-thirds of the decline.

What Now

Last week, Sika Chief Executive Paul Schuler told Reuters that it would be interested in buying some parts of the unit, but has ruled out bidding for the whole business.

Schuler noted that the company was interested in the sealants, flooring and mortar parts in particular.

“We would have a look at it,” Schuler said. “BASF have some fantastic businesses in there, they have a lot of interesting things which we would pick up if we could.”

Meanwhile, Sika is moving forward with its $2.5 billion purchase of French coatings company Parex, which was announced in January.

A possibility for the BASF deal could involve several companies teaming up to buy the business and split it amongst themselves.

According to Reuters, companies such as LafargeHolcim, Saint Gobain , GCP, RPM and Mapei are also seen as potential suitors for all or parts of the business, as well as buyout groups such as Advent, Carlyle or CVC.

   

Tagged categories: Acquisitions; BASF; Business matters; EMEA (Europe, Middle East and Africa); Good Technical Practice; Mergers; Sika

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