14 February 2013 13:26 [Source: ICIS news]
LONDON (ICIS)--Kemira has sold its 39% stake in Germany-based titanium dioxide (Ti02) joint venture Sachtleben to venture partner Rockwood Holdings, the Finnish water chemistry company said on Thursday.
The US-based specialty chemicals company is to pay €97.5m ($131.8m) for the stake, bringing its holding in Sachtleben to 100%, according to Rockwood. The deal is expected to close by 19 February this year.
The sale is to increase Kemira’s first-quarter cash flow, but will impact on its earnings before interest and taxation (EBIT) during the quarter as a result of a voluntary €25m write-down related to the transaction, the company added.
The company claimed that a weak performance by Sachtleben had a “substantial” impact on the company’s earnings per share during the fourth quarter of 2012, when Kemira reported a €40.6m net loss.
Sachtleben’s deteriorating performance was the result of a slowing Ti02 market, the company said at the time of its fourth-quarter results, released on 6 February.
Rockwood’s decision to acquire full ownership of Sachtleben is to allow more control and flexibility in considering its options for the loss-making business this year, according to Rockwood CEO Saifi Ghasemi.
He said: “It is our key objective this year to explore and execute on the best strategic option for Rockwood. Attaining 100% ownership of the joint venture provides us with the flexibility to achieve this goal.”
Kemira’s divestment was driven on a desire to sell off non-core assets and focus more closely on its core water chemicals business, according to the company.
“This divestment is again another milestone in implementing our water strategy and it frees up resources both in terms of management capacity and financing capabilities to fully focus on both,” said Kemira CEO Wolfgang Buchele.
The two companies formed the Sachtleben joint venture in September 2008 by combining Rockwood’s Ti02 pigments and functional additives business with Kemira’s Ti02 business.
The venture was bolstered in July 2012 with the acquisition of inventory and production assets from Crenox, a Germany-based Ti02 producer that had become insolvent. Sachtleben’s total production capacity is 340,000 tonnes/year of Ti02, according to Rockwood.
($1 = €0.74)
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