BASF to close construction chemicals sale by Q4
BASF is looking to achieve a contract close on the sale of its construction chemicals business by the end of the fourth quarter this year, as part of the German chemical group’s drive to focus on more profitable operations. The company has put the unit, along with its pigments business, on the sales block as it moves to shed non-core operations.
BASF’s Construction Chemicals division is one of the premier worldwide supplier of chemical systems and formulations for the construction industry. The company said that the business, whose products have been used in multiple small and large constructions all over the globe, was not deeply integrated into BASF’s production network and that it had fallen short of profitability targets.
Prospective buyers are currently evaluating the business, and a deal is expected to be agreed this year. Switzerland’s Sika, which brought French construction chemicals company Parex from CVC Capital Partners early this year, said it would be interested in the BASF unit but doubted a deal for all of the business was possible because of antitrust restrictions. Companies such as LafargeHolcim, Saint Gobain, GCP, RPM, and Mapei are also seen as potential suitors for all or parts of the business, as well as buyout groups such as Advent, Carlyle or CVC.
The company expects substantial cash flows from the sales in 2020. BASF had fired a warning shot earlier this month, signaling a weakening global economy, as the world’s largest chemical company said slowing markets from cars to crops and the impact of the U.S.-China trade war threaten to cut profit by 30% this year.