Clariant, Sabic Talks on Specialties JV Collapse, Clariant to Divest Masterbatches

Clariant and SABIC have agreed to temporarily suspend the discussions on the intended business combination High Performance Materials (HPM), consisting of Clariant’s Additives and high value Masterbatches and parts of SABIC’s Specialties business.

The JV talks with Saudi Basic Industries (SABIC) had been shelved due to differences over price, which comes as a further setback for the Swiss company whose CEO abruptly quit this week.

“Given the current market conditions, both parties have decided that temporarily suspending the negotiations is in the best interests of the respective shareholders of both companies,” the company said in its statement.

Both companies had been working to combine Clariant’s additives and specialty masterbatches with parts of SABIC’s specialty chemicals operation. They had expected to build an operation with 3.1 billion Swiss francs ($3.14 billion) in annual revenues controlled by the Swiss company.

The Swiss company said it would consider selling its specialty masterbatches business along with standard masterbatches that were already on the auction block.

“As part of the portfolio upgrade announced in September 2018, Clariant will continue with the divestment of the Pigments business and has decided to also divest the entire Masterbatches business including both, standard and high value Masterbatches. These divestments are expected to be concluded unchanged by end 2020,” the company stated.

“The proceeds from the divestments will be used to invest in innovations and technological applications within the core Business Areas, to strengthen Clariant’s balance sheet and to return capital to shareholders,” the statement added.

Source: Clariant