Strategic review prompts AkzoNobel paper chems unit divestment

(updates with Kemira comment, unit performance, additional detail)

LONDON (ICIS)–AkzoNobel’s decision to sell its paper chemicals business to Finland-based Kemira was taken after the business was judged to be non-core, the Netherlands-headquartered paints and coatings specialist said on Tuesday.

Kemira is to pay €153m for the business, with the transaction expected to close in the first quarter of 2015.

According to AkzoNobel, the divestment was decided following a strategic review of the business and how it aligns with the company’s core strengths.

“We have concluded that our paper chemicals business will have a better fit with another owner, allowing us to focus on our strong chemical platforms,” said Werner Fuhrmann, AkzoNobel’s executive committee member responsible for specialty chemicals.

Kemira has also entered into a distribution agreement on aspects of Akzo’s colloidal silica business relating to retention and drainage applications for the paper industry. AkzoNobel’s pulp and performance chemicals division will retain its pulp bleaching, colloidal silica and expandable microsphere operations following the close of the sale.

The paper chemicals business being acquired by Kemira generated revenues of €243m in 2013, of which 40% was derived from Europe, the Middle East and Africa (EMEA), 30% from the Americas, and 30% from the Asia Pacific region, including China.

The unit’s earnings before interest, taxes, depreciation and amortisation (EBITDA) for 2013 was €23m, Kemira added.

The company, which counts pulp and paper sector operations as one of its key focuses, alongside oil and gas, mining and water treatment chemicals, forecasts €15m of annual synergies from the purchase by the end of 2016.

“This acquisition is a major step in implementing our growth strategy and it significantly enhances our position, especially in the packaging and board industry and strengthens our presence in the Asia-Pacific region,” said Kemira CEO Jari Rosendal.

Additional reporting by Nurluqman Suratman