Solvay Said to Begin Marketing $1.6 Billion Polyamides UnitBy
Morgan Stanley advising Solvay on the potential transaction
Business supplies nylon-based materials for carpets, textiles
Solvay SA has started marketing for the sale of its nylon-materials business generating 1.4 billion euros ($1.6 billion) in revenue, according to people with knowledge of the situation.
Marketing documents were sent to potential bidders Wednesday for the operation that makes polyamides used in carpets and textiles, said the people, who asked not to be identified because details of the sale process are confidential. Morgan Stanley is acting as a financial adviser.
Spokesmen for Solvay and Morgan Stanley declined to comment.
The Brussels-based chemicals maker is looking to sell the unit to better focus on high-performance plastics and chemicals used in consumer goods and aerospace. Composites and adhesives for airplanes are a cornerstone of Chief Executive Officer Jean-Pierre Clamadieu’s strategy following Solvay’s purchase a year ago of plane-plastics maker Cytec Industries Inc. for about $6 billion.
In an Aug. 30 interview, the CEO said the next portfolio changes after acquisitions that included Cytec are likely to be disposals. He declined to provide details.
Solvay’s sale of its nylon-materials business would mirror a move last year by Royal DSM NV, which explored options for its caprolactam and nylon business before finally selling a majority stake to CVC Capital Partners Ltd. Honeywell International Inc. is opting for an initial public offering of its own business making caprolactam, the raw material for nylon.
Solvay shares rose 1.1 percent to 99.46 euros at 10:18 a.m. in Brussels.
Among possible bidders for the Solvay operation is Celanese Corp., whose CEO, Mark Rohr, said earlier this year the Irving, Texas-based company would consider ways to expand in nylon materials to broaden its portfolio beyond thermoplastics. Celanese doesn’t comment on rumor or speculation, according to spokesman Travis Jacobsen.
Solvay could also sell Acetow, a business making materials for cigarette filters. After years of resilient earnings, the unit has suffered from de-stocking, spreading outward from China. The situation is now improving and orders are normalizing, Clamadieu said in the interview, adding that more information on strategy will be given at a Sept. 29 investor day.
— With assistance by Caroline Connan