Belgium-based chemical supplier Solvay SA has sold 70.59 per cent of its stake in Solvay Indupa – a Brazilian firm said to be South America’s second largest PVC producer – to Braskem, one of Brazil’s leading PVC makers.
According to a statement from Solvay, the transaction is based on a total enterprise value of US$290 million, which includes Solvay Indupa’s net financial debt, accounted at year-end 2012 as 178 million euros. The cash proceeds for Solvay’s equity stake are US$25 million. According to Solvay, the divestment is expected to result in a non-cash net loss of about 120 million euros.
“This divestment is part of Solvay’s strategic portfolio management. It will reduce the Group’s exposure to the economic cycle and to energy-intensive businesses, allowing Solvay to achieve higher growth, higher returns and lower capital intensity,” said Jacques Van Rijckevorsel, a member of Solvay’s executive committee. “As part of Braskem, Solvay Indupa will enjoy ready access to raw materials and energy which will enhance its position in a competitive and growing market. This will allow Solvay Indupa to develop its activities sustainably in Latin America for the benefit of both its customers and employees."
Created in 1948, Solvay Indupa has 936 employees and two production sites in Argentina and Brazil. The company reported net sales of 542 million euros in 2012.