Karig added that, from Solvay’s perspective, the company is moving away from nylon, an engineering resin that has a large number of commodity applications such as fiber. At the same time, he explained, Solvay is reserving the right to source nylon later to produce nylon compounds that are more specialty grades.
BASF, according to Karig, is “enlarging its portfolio of engineering resins that they view as ‘specialty enough’ to continue investing in.”
Another longtime market watcher told Plastics News that “it looks like the [Solvay nylon] business has found a good home, with a new owner who has a long term vision and the resources to succeed.”
The move, which is part of Solvay’s transformation strategy to become a “multi-specialty” chemical company, the Brussels-based company said.
According to BASF, the acquisition is expected to improve the net financial position of the group by about 1.3 billions euros ($1.55 billion).
The business unit will complement BASF’s engineering plastics portfolio as it will be integrated into the performance materials and monomers divisions, according to Ludwigshafen, Germanybased BASF.
In terms of regions, BASF said the transaction would enhance its access to key growth markets in Asia and South America.
The former Solvay unit will also strengthen BASF’s nylon 6/6 value chain as it will increase polymerization capacities and the backward integration into the key raw material adipodinitrile (ADN).
For the full year 2016, net sales of the business to be purchased from Solvay amounted to 1.315 billion euros ($1.57 billion) and earnings before interest, tax, depreciation and amortization (EBITDA) around 200 million euros ($239 million).
The unit has employs nearly 2,400 globally, of which approximately 1,300 are based in France.
Worldwide, it operates 12 production sites, four research locations and 10 technical support centers. The business would be integrated into BASF’s performance materials and monomers divisions.
“Solvay’s planned divestment of polyamides marks a tipping point in the profound transformation journey we began four years ago. Successful completion of this transaction will further reinforce Solvay as a multi-specialty chemical group, delivering superior growth and sustainable value,” said Jean-Pierre Clamadieu, CEO of Solvay.
The execution of definitive agreements is expected in the coming months following consultation with the relevant social bodies.
The two companies said they aimed to close the transaction in the third quarter of 2018, after receiving regulatory approvals.
Plastics News Europe contributed to this report.