Solvay announced it is reviewing plans to separate the Company into two independent publicly traded companies:
- EssentialCo would comprise leading mono-technology businesses including Soda Ash, Peroxides, Silica and Coatis, which are reported as the Company’s Chemicals segment, as well as the Special Chem business. These businesses generated approximately €4.1 bn in net sales in 2021.
- SpecialtyCo would comprise the Company’s currently reported Materials segment, including its high-growth, high-margin Specialty Polymers, its high-performance Composites business, as well as the majority of its Solutions segment, including Novecare, Technology Solutions, Aroma Performance, and Oil & Gas. These businesses combined generated approximately €6.0 bn in net sales in 2021.
“The plan to separate into two leading companies represents a pivotal moment in our journey to transform and simplify Solvay. Since we first launched our G.R.O.W. strategy in 2019, we have taken a number of actions to strengthen our financial and operational performance, focus our portfolio on higher growth and higher margin businesses, and reinforce our business purpose across the organization.
At the same time, the Chemicals segment has continued its strong track record of resilient cash generation. Notwithstanding the challenges of the current global environment, we are confident that pursuing this plan would enable us to create compelling value for shareholders over the long-term,” said Solvay CEO, Ilham Kadri.
Upon completion, the separation would establish two strong industry leaders that would benefit from the strategic and financial flexibility to focus on their distinctive business models, market and stakeholder priorities.
As an independent company, EssentialCo would be positioned to further reinforce its leadership through expansion and consolidation opportunities, including accelerating growth in natural soda ash and sodium bicarbonate, pursuing growth in the Asia-Pacific region and further extending its leadership in a consolidating peroxide market.
It would also play a key role in accelerating the energy transition that began in its soda ash business in order to be carbon neutral before 2050. Following the separation, EssentialCo would strengthen its operating model by enhancing its cost leadership and maximizing cash generation.
As an independent company, SpecialtyCo would provide innovative, value-added solutions that support a more sustainable world, driving above market growth and strong returns. SpecialtyCo would be comprised of two business segments:
Materials: The Materials segment is an industry leader in advanced materials, focused on bringing new solutions to customers that address critical performance and environmental challenges. Materials has the broadest portfolio of unique, patented materials based on high-performance polymer and carbon fiber composite technologies, with leading global positions in all core markets.
Consumer & Resources: The Consumer & Resources segment primarily consists of businesses within Solvay’s current Solutions segment and would be a market leader in providing specialty ingredients focused on more natural and sustainable solutions by anticipating rapidly evolving customer needs.
Under the separation plan, Solvay’s shareholders would retain their current shares of Solvay stock, which will continue to be listed on Euronext Brussels and Euronext Paris. The separation would be affected by means of a partial demerger of Solvay whereby the specialty businesses will be spun off to SpecialtyCo. Solvay shareholders at the time of separation would receive shares in SpecialtyCo pro rata to their shareholding in Solvay SA.
The transaction, which is subject to general market conditions and customary closing conditions is expected to be completed in the second half of 2023.