Solvay poised to achieve largest acquisition in the History of the Group
Solvay has signed today an agreement with Montedison and Longside International aiming at acquiring Ausimont, the fluorinated specialties group. This acquisition would be the largest ever made by Solvay and would significantly upgrade the Group's product portfolio, by doubling the size of its activities in the high-growth, high-added-value fluorinated specialties sector.
After the completion of the transaction, Solvay's fluorinated specialties would generate an annual proforma turnover of approximately EUR 900 million, with 2,700 employees. Solvay would be N°2 worldwide in fluoroproducts.
The proposed transaction is subject to regulatory approval by the relevant authorities. Upon satisfaction of this condition, Solvay would acquire 100% of the capital of Ausimont and 100% of Agora, Ausimont's holding company, for EUR 1.3 billion.
The price reflects the excellent profitability of Ausimont as well as its strong growth. Furthermore, this acquisition implies significant synergies, given the complementarity between the activities of Ausimont and those of Solvay in fluorinated specialties.
Completion of the acquisition is anticipated in the first half of 2002.
The information and consultation process of the workers' representatives is in progress.
Aloïs Michielsen, chairman of Solvay's Executive Committee said: "The planned acquisition of Ausimont is a unique opportunity for Solvay to leap forward in its strategy to build leadership positions in high-value specialty products. Solvay has the expertise and resources to seize this opportunity, which would change the face of the group, improve its competitiveness, boost innovation, enhance profit margins and secure future growth. With this operation, Solvay would become a leading global player in fluorochemicals and fluoropolymers. Also, Ausimont would contribute its outstanding R&D capabilities, which would further enrich Solvay's product portfolio - with products that have an extensive technological content."
Vincenzo Morici, General Manager Solvay's Specialty polymers and performance compounds, indicated: "Ausimont's fluoropolymer products and know-how are ideal complements to our group's high performance polymers, which were already expanded through our deal with BP. Solvay would gain access to crucial expertise in monomers - the building blocks of fluorinated plastics - and upgrade its entire value chain. As well, Ausimont would be contributing two whole new lines of fast-growing fluoro-materials to Solvay's portfolio: fluoroelastomers and fluids."
Eberhard Piepho, General Manager of Solvay's Fluorine Business stressed that "Through this operation, Solvay would significantly enhance its fluoroderivatives portfolio and complement extensively its R&D and sales&marketing. Furthermore, through the integration of Ausimont's activities, Solvay would have a unique fluoride value chain spreading from fluorspar mines in Namibia down to the marketing of sophisticated fluorinated products."
This acquisition would be financed through the Group's available cash and through a structured funding from a third party. The mechanism of this funding would allow the Group to "cash in" in advance the proceeds that would be paid by BP if Solvay were to exercise its put option on its interest in the BP Solvay Polyethylene joint ventures. Under the agreement signed with BP concerning the HDPE joint ventures, the put option gives Solvay the right to sell, at a determined price and at a fixed date, its participation in the European and American Joint ventures.
This structured funding would become effective only upon closing of the Ausimont operation.
As a result, Solvay would fund this acquisition without imposing an excessive burden on its finances - i.e. it would continue to meet its goal not to exceed lastingly a 35% net debt to equity ratio. In 2000, this ratio was 29%.
SOLVAY is an international chemicals and pharmaceuticals group with headquarters in Brussels. It employs about 32,000 people in 50 countries. In 2000 its consolidated sales amounted to EUR 8.9 billion generated by its four sectors of activity: Chemicals, Plastics, Processing and Pharmaceuticals. It is already active in the area of fluorinated specialties. Solvay is listed on the Euronext 100 index of top European companies. Details are available at www.solvay.com
AUSIMONT is a manufacturer of fluorinated specialties based in Bollate (Milan), which operates seven production and R&D sites in Europe and the United States. The company has some 2000 employees, including 250 highly qualified researchers and generates an annual turnover of some EUR 600 million.
LONGSIDE INTERNATIONAL is a company which holds 20% of Agora. It is itself controlled by ATHENA PRIVATE EQUITY, a European investment fund set up by European banks.
AGORA is a sub-holding of the Montedison Group, which holds 100% of Ausimont.
MONTEDISON is an international industrial and services group, which has almost 33,000 employees and generated a turnover of EUR 14.3 billion in 2000.
