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Clariants pigments auction due to get under way

January 28/2020

MOSCOW (MRC) -- Clariant is reviving the sale of its pigments unit, people familiar with the matter told Reuters, which may fetch up to 900 million Swiss francs (USD927.7 million) as the Swiss chemicals maker slims down after failing to combine with peers, said Reuters.

Deutsche Bank, mandated by Clariant to find a buyer, will launch the auction next month, one of the sources said. Information memorandums are going to private equity groups such as Cinven, Bain, Triton, Ardian and SK Capital in the first quarter, several people said.

Clariants pigments business, which makes dyes including for the car and building industries, may be valued at 800-900 million francs, or around 8 times core earnings.

The auction was initially slated for a year ago, but Clariant put it on a back burner after rival BASF put a similar business on the block, then sold it to Japanese printing ink maker DIC Corp (4631.T).

While BASFs unit was sold at a valuation of 9-10 times core earnings, Clariants more-commoditised business may fetch less amid a tough economic climate, one of the sources said.

Analysts from Vontobel this month suggested Clariants pigments unit could fetch 900 million francs, bringing the total haul from disposals to at least 2.8 billion francs.

Slimming down could have its price in independence, they added. "Clariant is a very attractive takeover target after the disposals in 2020," Vontobel said.

Clariant declined to comment on the auctions time frame or valuation. The Muttenz, Switzerland-based company is also seeking a new CEO after the last one bolted in August following a difference of opinion with Chairman Hariolf Kottmann, who is now running Clariant on an interim basis.

Clariants failed merger with Huntsman (HUN.N), in the face of activist investor resistance, and the joint venture it abandoned in August with Saudi Basic Industries (SABIC) have led to asset sales beyond what the Swiss company originally envisioned.

Clariant is concentrating on its faster-growing segments including catalysts, ingredients for shampoos, and chemicals for the oil and gas industries, while unloading commoditised operations.

As MRC informed earlier, Clariant (Muttenz, Switzerland) agreed to sell its entire Masterbatches business to PolyOne Corp. (Avon Lake, Ohio). The transaction values the Masterbatches business at USD1,560 million, representing about 12.2 times the last twelve months reported EBITDA (ending September 2019) on a cash and debt free basis. This amount is payable at closing, which is expected by Q3 2020.

Ethylene and propylene are feedstocks for producing PE and polypropylene (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,904,410 tonnes in the first eleven months of 2019, up by 6% year on year. Shipments of all PE grades increased. PE shipments increased from both domestic producers and foreign suppliers. The PP consumption in the Russian market was 1,161,830 tonnes in January-November 2019, up by 7% year on year. Deliveries of all grades of propylene polymers increased, with the homopolymer PP segment accounting for the largest increase.

Clariant AG is a Swiss chemical company and a world leader in the production of specialty chemicals for the textile, printing, mining and metallurgical industries. It is engaged in processing crude oil products in pigments, plastics and paints. Clariant India has local masterbatch production activities at Rania, Kalol and Nandesari (Gujarat) and Vashere (Maharashtra) sites in India.
Author:Anna Larionova
Tags:pigmentniy krasitel, construction, paints and coatings, Clariant International.
Category:General News
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