04 April 2011 07:58 [Source: ICIS news]
(adds details throughout, comments from Solvay CEO)
The two companies signed a framework agreement on Sunday on the “friendly cash offer”, Solvay said in a statement.
“A tender offer conditional upon the approval by EU and US anti-trust authorities and upon a minimum acceptance level of 50% plus one share will be filed in the coming days,” Solvay said.
The offer, which reflects a €6.6bn enterprise value for Rhodia, will be launched in
“The offer represents a premium of 50% compared to the closing price of Rhodia on the 1st of April 2011 and a premium of 44% compared to the average closing share price over the last three months,” it said.
The deal, which has been unanimously recommended by Rhodia’s board of directors, will create a new group with sales of €12bn, Solvay said.
“We have a shared vision in that we want to create a new group to achieve our goal of sustainable growth and development in chemistry,” said Solvay CEO Christian Jourquin.
"We see the possibility of doubling our REBITDA [recurring earnings before interest, tax, depreciation and amortisation] to almost €2bn and creating a major global chemicals platform under the banner of Solvay,” he added.
Combining the businesses of Solvay and Rhodia is estimated to generate annual cost synergies of €250m within three years, mostly through external cost optimisation, Solvay said.
“No major downsizing is planned in the context of this combination,” the company said.
Solvay expects the deal to close in late August.
Rhodia chairman and CEO Jean-Pierre Clamadieu will join Solvay's executive committee, to take up the role of deputy CEO once the offer closes, to facilitate the integration of the two companies, it said. Clamadieu is intended to succeed Jourquin upon his retirement as Solvay CEO.
Rhodia chief operating officer Gilles Auffret, meanwhile, will be appointed as CEO of Rhodia and as a member of Solvay’s executive committee.
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