US technology company W.R. Grace is buying Albemarle’s polyolefin catalysts business for $416 million. The deal will strengthen Grace’s single-site PE catalysts portfolio while allowing Albemarle to streamline its portfolio.

Albemarle’s catalyst business has a leading position in single-site PE catalysts and includes significant R&D capabilities along with manufacturing operations in Baton Rouge, Louisiana, USA, and Yeosu, South Korea.

Grace plans to finance the purchase through a combination of debt and cash. Last year, the US company acquired BASF’s PE/PP catalyst assets, having previously acquired Dow Chemical's PP licensing and catalyst business in 2013.

Commenting on the deal, Laurence Alexander, an analyst with US investment bank Jefferies, said Albemarle’s decision to exit the polyolefin catalyst business reflects both a shrinking opportunity set for M&A and an unwillingness to pay the kinds of multiples necessary to build sufficient diversity and scale.

He added that Grace will become the leading supplier of polyolefin catalysts, which will account for 32% of its sale, up from 28% prior to the deal. Alexander noted that the market for single-site catalysts is growing at about 8% per year.

In separate news, Grace has won a contract to license its Unipol PP technology to Kuwait Integrated Petroleum Industries Company (KIPIC) for a 940,000 t/y plant that will be integrated within the Al-Zour refinery, located south of Kuwait City. The facility, which is expected to go into operation in 2023, will produce high-end homopolymer, random copolymer and impact copolymer resins.