At the same time, Solvay announced that it is merging its various plastics-related business units into a single one, Solvay Specialty Polymers. The new unit will include established businesses Solvay Advanced Polymers, Solvay Padanaplast, Solvay Solexis and SolVin PVDC.
The business units that comprise the new Solvay Specialty Polymers business unit had combined sales of approximately €1.1 billion in 2010, approximately 15% of the Solvay Group's total sales. Headquartered in Bollate, Italy, its activities employee over 2500 across 26 locations throughout North and South America, Asia and Europe.
Solvay's plastics businesses are a major supplier of PVC and also aromatic polyamide, fluoroelastomers and fluoropolymers, liquid crystal polymer, and high-heat materials such as PEEK and PAI, as well as others. The company's plastics investments of the last few years mostly have been in PEEK and other high-end materials.
Solvay made some moves last year that were clearly those of a company dieting before its big wedding. It divested its 50% stake in fuel tank blowmolder Inergy, and then announced a plan to reduce its workforce by 800 employees, or almost 5%, a move that Solvay management said in a statement made then would "lay the foundations of a new Solvay after the sale of the pharmaceuticals activities and before the reinvestment of the proceeds of this sale."
In the November 2010 issue of Modern Plastics we guessed at either India's Reliance or Brazil's Braskem as potential partners for Solvay, but Rhodia makes sense in many ways. The companies have similar cultures-Rhodia's roots are in France, Solvay's in Belgium-and neither their plastics portfolios nor their much larger chemicals products' portfolios overlap significantly.
Solvay's acquisition offer for Rhodia already has been recommended unanimously for approval by the board of directors of Rhodia, and that's little surprise as Rhodia's shareholders stand to benefit plenty. The cash offer at €31.60 per share (ex dividend of EUR 0.5 per share) represents a premium of 50% compared to the closing price of Rhodia on April 1, 2011 and a premium of 44% compared to the average closing share price over the last three months. The offer will be launched in France and extended to the U.S.A.
Solvay will fully finance the transaction with cash, it says. In 2009 Solvay sold its pharmaceutical business to Abbott for about €5.2 billion, and announced then it would use the proceeds to grow its plastics and chemicals divisions both internally and via acquisitions.
According to Solvay, 90% of the sales realized by a merged Solvay/Rhodia (combined sales of €12 billion) are realized in businesses where it is already among the top three worldwide. Solvay is a leader in high performance specialty polymers, in soda ash and hydrogen peroxide, while Rhodia holds leadership positions in specialty materials (silica, rare earths), products for consumer markets (surfactants, natural polymers, acetate tow) and engineering plastics based on polyamide 6.6.
Jean-Pierre Clamadieu, chairman and CEO of Rhodia, will join Solvay's Executive Committee in the role of Deputy CEO once the offer is closed. Clamadieu is intended to succeed Solvay's current CEO Christian Jourquin upon his retirement. Solvay expects that the offer will be closed by late August 2011.