BASF to Merge Paper, Water Chemicals Business with Solenis

BASF SE and Solenis have signed an agreement to join forces by combining their paper wet-end and water chemicals businesses.

The goal is to create a customer-focused global solutions provider for the industry. For the paper industry, the product portfolio of the combined enterprise will cover the entire range of functional and process wet-end chemicals, solutions for the water cycle for paper mills, as well as comprehensive service capabilities.

For the water treatment industry, the customers of the joint organization will benefit from Solenis’ high-quality service capabilities and BASF’s broad water treatment chemicals platform.

The closing of the transaction is anticipated for the end of 2018 at the earliest.

BASF will hold a 49 percent share of the combined entity that will operate under the Solenis name and be headquartered in Wilmington, Delaware, US. BASF will nominate three out of seven shareholder representatives of the joint entity that will continue to be led by current president and chief executive officer (CEO) John Panichella of Solenis. 51 percent of the shares will be held by funds managed by Clayton, Dubilier & Rice.

The transaction comprises BASF’s global paper wet-end and water chemicals business with 2017 sales of around €800 million and around 1,300 employees globally.

The transfer includes production sites and plants of the paper wet-end and water chemicals business in Bradford and Grimsby, UK; Suffolk, Virginia, US; Altamira, Mexico; Ankleshwar, India, and Kwinana, Australia.

BASF’s paper and water chemicals production plants strongly embedded in the Verbund in Ludwigshafen, Germany, and Nanjing, China, are not transferred and will deliver products and raw materials to the combined entity under mid- to long-term supply agreements.

BASF’s paper coating chemicals portfolio is not part of the transaction.  

“The transaction underlines BASF’s active portfolio management and enables us to share in the future success of this promising joint entity,” said Dr Markus Kamieth, member of the board of executive directors of BASF SE and responsible for the performance products segment.

“We will remain committed to the paper and water treatment industries through our 49 percent ownership of the combined entity and bring our excellent technologies, products, and production processes. Combined with Solenis’ service capabilities, we will create additional value for our customers. They will benefit from our joint innovation activities, complimentary state-of-the-art product portfolios, and dedicated service and application support,” added Anup Kothari, president of BASF’s performance chemicals division.

“Together, we have a unique opportunity to create a customer-focused global speciality chemical company with an enhanced focus and expanded offerings. I am pleased that our cultures are closely aligned and that our companies share a strong common desire to create value for our customers. Together, as one team of experts, we will continue to strive towards excellence in innovation, sustainability and safety,” said John Panichella, CEO of Solenis.

BASF and Solenis will continue to operate as independent companies until the completion of the transaction.