Wendell considers selling chemical giant Stahl for $2.1 billion

French investment company Wendel SE is considering selling its 68% stake in Stahl Holdings BV, a Dutch chemical manufacturer specializing in coatings and surface treatments for materials such as leather, plastics and textiles. According to media reports, the sale could value Stahl at up to 2 billion euros ($2.1 billion). The deal is still in its early stages. Wendel is exploring this option as part of its broader strategic shift, which includes divesting non-core assets and focusing on expanding its asset management business.

Wendel acquired Stahl in 2006 in conjunction with the Carlyle Group for approximately 520 million euros. Since then, Stahl has become a leading player in the chemicals industry, especially in the production of specialty chemicals for the leather industry, including treatments for car seats, handbags and other high-end consumer products. Stahl's product portfolio also includes surface treatments for textiles and plastics. The company had sales of approximately 914 million euros last year and continues to expand through strategic acquisitions. Stahl acquired BASF SE's leather chemicals unit in 2007 and further solidified its position in the industry by acquiring a similar business from Clariant AG of Switzerland.

Stahl has been refocusing its business in recent months. Earlier this year, the company agreed to sell its wet-end leather chemicals business to private equity firm Syntagma Capital, a move in line with its goal of transforming into a specialty coatings company focused on flexible materials. The shift is seen as part of a broader trend in the chemicals industry, where companies are streamlining their portfolios to focus on high-growth, high-margin segments.

Wendel's decision to explore a sale of Stahl is a result of its broader strategic plan to grow its portfolio. The company has been transitioning to a more diversified business model with a focus on asset management. In line with that strategy, Wendel acquired a majority stake in U.K. buyout firm IK Partners earlier this year and in October agreed to buy a majority stake in U.S. private lender Monroe Capital Corp. for $1.13 billion. If the sale of Stahl goes through, it could provide a further boost to Wendel's efforts to raise capital and refocus on managing third-party assets.

The private equity firm had previously considered various strategic options for Stahl, including an initial public offering (IPO) or a sale, but ultimately chose to explore a sale option given favorable market conditions. The potential sale would add to ongoing deal activity in the chemicals sector, with other private equity firms also making moves. The Carlyle Group, which also holds a stake in Stahl, is reviving IPO plans for specialty chemicals producer Nouryon while also separately exploring a sale of Nobian, the chemicals unit spun off from Nouryon in 2021.

A potential sale of Stahl could also be a significant event in the global chemicals market, where consolidation and restructuring have been a prominent trend over the past few years. For Wendel, selling its stake in Stahl would mark an exit from a long-term investment and provide an opportunity to allocate resources to its growing asset management business. While negotiations are still in the early stages, the sale is likely to attract significant interest from private equity firms and strategic buyers as demand in the specialty chemicals market continues to be strong, especially in high-value industries such as automotive, fashion and flexible materials.