BASF Construction Chemicals Exit Stalls
BASF’s planned exit from the construction chemicals sector may take longer than expected, reports from the market suggest.
In the latest setback, sources speaking to the Bloomberg news agency said Swiss cement manufacturer LafargeHolcim, the sole remaining company interested in the additives portfolio, has opted not to bid because it considers the price too high.
The cement producer also reportedly had concerns about how long it would take for BASF to execute the sale, which could hurt the performance and integration of the business. The division produces mortars and cement additives, as well as waterproofing materials and sealants.
LafargeHolcim is said to have been competing with private equity investor Cinven for the business; however, both it and roofing materials specialist Standard Industries have since stepped back from the plate. Cinven owns construction chemicals producer Chryso, which offer synergies but also pose antitrust issues, the news agency noted.
BASF kicked off the sales process In January this year, saying it expected to divest all the activities acquired in 2006 from the former Degussa (now Evonik) for a total of about €2.7 billion, potentially by the end of 2019.
Announcing a strategic review of the business in October last year, then new-CEO Martin Brudermüller suggested that a partnership might be considered if targets for the divestment were not met.
Bloomberg’s analysts now expect the focus of the sale to shift from the industrial to the private equity sector. However, the news agency added that several other private equity buyers have already walked away from the bidding, with some saying BASF did not provide detailed information on earnings.
