AkzoNobel to Sell Off Adhesives Unit
AkzoNobel’s Decorative Paints business will shrink yet again, as the company has announced plans to sell its Building Adhesives business to specialty chemical provider Sika AG for €260 million ($348.1 million USD).
The sale of the stand-alone business "follows a strategic review of the business' fit within AkzoNobel's portfolio," the world's largest paint and coatings company announced Thursday (Aug. 8).
AkzoNobel will use proceeds of the sale "to repay short-term debt and improve liquidity," said the company, which just completed a disappointing second quarter and a grim 2012 that ended in an aggressive restructuring plan.
The divestment is just the latest hit for the struggling Decorative Paints business. In June, AkzoNobel announced that it would sell off its network of German paint stores. In April, it completed the $1.05 billion sale of its North American Decorative Paints business to PPG Industries.
The Building Adhesives unit includes high-performance floor and wall leveling compounds, floor adhesives, tile setting, sealants and floor finishes. Its brands include Schönox, Casco, Cégécol, Synteko and EriKeeper. The business primarily serves the professional market in northwestern Europe.
The unit's brands primarily serve the professional market in northwestern Europe.
The deal would transfer all of Building Adhesives’ approximately 550 employees and two manufacturing facilities in Rosendahl (Germany) and Damville (France) to Swiss-based Sika AG. The business also has a pan-European distribution network with nine distribution centers.
The sale does not include AkzoNobel’s Wood Finishes and Adhesives business (which also operates under the Casco brand).
The transaction is expected to be completed in the fourth quarter of this year, subject to regular consultation with employee representatives.
Focus on Paint
"We want to focus our Decorative Paints business at AkzoNobel on the strong strategic paint positions we have in Europe and the growth markets of Asia and South America,” AkzoNobel CEO Ton Büchner said in a prepared statement.
CEO Ton Büchner said AkzoNobel's Decorative Paint business would focus on Europe, Asia and South America.
“The intended sale of Building Adhesives is in line with this strategy. In Sika, with its portfolio of businesses in this industry, we are pleased to have found a good future home for this business."
Sika AG is a global specialty chemicals company that produces concrete admixtures, specialty mortars, sealants and adhesives, damping and reinforcing materials, structural strengthening systems, industrial flooring, and roofing and waterproofing systems.
Sika AG's vast portfolio of construction markets serves a variety of commercial, automotive and industrial markets worldwide.
In a release, Sika said the acquisition would bring "successful and highly innovative products" into its vast holdings.
Sika CEO Jan Jenisch said the company "is looking forward to welcoming the successful team from the Building Adhesives business of AkzoNobel. The acquisition will make Sika a strong player in the interior finishing construction market and will complement our product range."
Last month, Sika announced the acquisition of Radmix Resources Pty Ltd of Australia and its manufacturing partner ASF (Australian Synthetic Fibres) Pty Ltd. The acquisition will expand Sika's presence in the mining market.