MOSCOW (MRC) -- Solvay, the Belgian maker of chemicals and plastics, has agreed to buy Cytec Industries for USD5.5 billion to become the world’s second-largest producer of aerospace composite materials, reported the producer on its site.
Shareholders of Cytec will receive USD75.25/share in cash, the Brussels-based company said Wednesday. That’s 29% higher than Tuesday’s closing price for Woodland Park, New Jersey-based Cytec.
The transaction is part of CEO Jean- Pierre Clamadieu’s strategy to shift Solvay away from commodity products. The 152-year-old company is focusing on more specialized polymers used to replace heavier metal parts in cars, appliances and airplanes. Cytec is a leader in specialty chemicals to enhance mining separation processes and is developing composites for the car industry.
"This is a very significant, but not the last, step in the transformation of Solvay," Clamadieu said on a conference call with reporters. "We will continue to look for opportunities to divest or invest in businesses."
The purchase will boost adjusted earnings per share after the first year of completion, Solvay said. The company aims for annual pretax synergies of more than EUR100 million (USD111 million) within three years.
Antitrust issues can be dealt with easily, and the company is confident it can complete the transaction, Clamadieu said. The company aims to wrap up the deal in the fourth quarter 2015.
Including debt, the acquisition values Cytec at USD6.4 billion, Solvay said. That makes it about the same size as its biggest deal, the 2011 purchase of French chemical company Rhodia.
As MRC informed previously, in early 2015, Solvay completed the acquisition of the Ryton PPS (polyphenylene sulphide) business from US-based Chevron Phillips Chemical Company for USD220 million, enlarging its high-performance polymers offering and entering a solid growth market.
Solvay S.A. is a Belgian chemical company founded in 1863, with its head office in Neder-Over-Heembeek, Brussels, Belgium. The company has diversified into two major sectors of activity: chemicals and plastics. Solvay supplies over 1500 products across 35 brands of high-performance polymers - fluoropolymers, fluoroelastomers, fluorinated fluids, semi-aromatic polyamides, sulfone polymers, aromatic ultra polymers, high-barrier polymers and cross-linked high-performance compounds.
MRC