BASF to Start Sale of $3 Billion Construction Chemicals Arm
(Bloomberg) -- BASF SE has kicked off a sale process for its construction chemical business, which could fetch about 2.7 billion euros ($3 billion), people with knowledge of the matter said.
The German company has started to contact select interested parties, a BASF representative said in response to Bloomberg queries, declining to comment further. Carlyle Group LP and building-materials maker Standard Industries Inc. are among potential suitors considering offers for the unit, the people said.
It could also attract interest from other private equity firms including Bain Capital, Cinven and KKR & Co., according to the people, who asked not to be identified because the information is private.
The BASF unit generated earnings before interest, taxes, depreciation and amortization of 245 million euros last year on 2.4 billion euros of sales, the people said. Potential bidders may seek to value the business at around 11 times earnings, according to two of the people.
BASF expanded in construction chemicals through its 2006 acquisition of a Degussa AG unit. The German company has struggled with scale as well as the complexity of the market, since local construction techniques can differ even from country to country.
Consolidation in the building-materials industry has strengthened the hand of enlarged companies when negotiating with suppliers of grouts, mortars and admixtures, which are added before or after mixing cement to enhance properties like drying times and water content. BASF Chief Executive Officer Martin Brudermueller announced a strategic review of the business in October, and the company has said it aims to reach an agreement by the end of this year.
A deal would follow CVC Capital Partners's agreement in January to sell Parex Group to Sika AG for Swiss 2.5 billion francs ($2.5 billion) including debt. That transaction valued the French producer of construction chemicals at 12.8 times earnings.
No final decisions have been made, and there's no certainty the suitors will proceed to submit offers for the BASF business, the people said. Representatives for Bain, Carlyle, Cinven, KKR and Standard Industries declined to comment.
To contact the reporters on this story: Andrew Noël in London at anoel@bloomberg.net;Myriam Balezou in London at mbalezou@bloomberg.net
To contact the editors responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net, ;Dinesh Nair at dnair5@bloomberg.net, Ben Scent, Michael Hytha
©2019 Bloomberg L.P.
-
Talking Points This Week: Tech Nerves, FII Buying, And A Faraway Banking Shock
The global markets are not shining this Diwali. The exception in the large markets is, India.
-
Midterm Rally Lasted A Day. The Hard Reality Of A Divided US May Last Two Years | Opinion
Between a contested AI boom, a debt ceiling that arrives in 2027 and a president with every incentive to act alone, the next two years may prove more volatile than the first day's rally suggests.
-
Blue Wave Will Derail the AI Trade but Won't Dismantle the AI Era | Unhedged Position
The Democrats' sweep of the US Congress will see politics collide with economic forces both over the long and short term.
-
It's Time To Take The GST Council's Bet On Trust Global
Payment records can prove India's services exports, and clear, proportionate rules can bring foreign digital sellers into the tax net.
-
Opinion | India at 38: From Innovation Overperformer to Innovation Powerhouse
India now has 453 VC-backed deep science startups, 18 of them late-stage, after 117 percent growth since 2020. Laurus Labs, at USD 9.3 billion, is the most valuable deep science company in any middle-income economy outside China.
-
Navigating Energy Crossroads: S Jaishankar's Call For Diversified Supply Chains At G20 Ministerial Meeting
As geopolitical fault lines continue to test maritime trade routes and commodity flows, Jaishankar's message remains pertinent: true economic resilience requires open markets, protected transit lines, and a genuine commitment to multilateral cooperation rather than coercion.
-
Indians Are Travelling, But Not Every Journey Is A Holiday | The Week In Whys
Pilgrims, patients and working women are the real travellers, and the system hasn't quite caught up with them.
-
Getting To Work Costs Women More | The Reason Why
It is not just about women paying more than men. It is about women paying much more in cities than in villages.
-
AI Bias In Investing Cannot Be Eliminated, But It Can Be Governed
Framing is a particularly important example as identical financial information presented in terms of gains rather than losses can lead an LLM to reach a different assessment.
