BASF to Sell Construction Chemicals Business for $3.5 Billion
December 21 2019 - 8:23AM
Dow Jones News
By Sara Germano
BERLIN -- Chemicals giant BASF said it has agreed to sell its
construction chemicals unit for EUR3.17 billion ($3.52 billion), as
the German company works to boost profitability through ongoing
turnaround efforts.
The sale, to private-equity firm Lone Star Funds, is expected to
close in the third quarter of 2020 and is subject to regulatory
approval, BASF said in a statement Saturday.
Donald Quintin, president of Europe at Lone Star, said the
acquisition will complement the fund's existing investments in the
construction materials industry.
Over the past year BASF has announced job cuts and slashed
profit expectations as it works to contend with slowing demand,
particularly in the automotive sector, as well as the effects of
the continuing U.S.-China trade war. Its portfolio of products
extends from oil and gas to plastics and agriculture.
In July, the company said it would cut 6,000 jobs, or 5% of its
global workforce, by 2021 in an effort to generate annual savings
of EUR300 million. Those cuts came several months after BASF laid
out restructuring efforts in November 2018.
For the most recent quarter ended in September, the construction
chemicals business recorded sales growth of 5% over the prior-year
period, mainly due to currency effects. BASF said the unit includes
7,000 employees in 60 countries around the world, with annual sales
of EUR2.5 billion in 2018.
Dallas-based Lone Star was founded in 1995 and comprises 20
funds with total capital commitments of approximately $85 billion,
according to its website.
Write to Sara Germano at sara.germano@wsj.com
(END) Dow Jones Newswires
December 21, 2019 08:08 ET (13:08 GMT)
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