Profit Is Not Up To Expectations, BASF 3 Billion 170 Million Euros Officially Sell Construction Chemicals Business!

On December 21st, BASF announced that it would sell its construction chemicals business to the Lone Star of the US private placement company for 3 billion 170 million euros, and the transaction will be completed in the third quarter of 2020.

At present, BASF construction chemicals employs 7000 employees, and its sales volume is about 2 billion 500 million euros in 2018. It is the world's largest manufacturer of concrete chemical additives. Its representative project is the largest railway tunnel in Switzerland, Switzerland.

As early as last autumn, BASF CEO announced that it would divest the business on the grounds that the coordination effect of chemical building materials business and other business areas was not obvious and profitability was not up to expectations.

At that time, it was reported that building materials manufacturers Standard Industries and several private equity groups were competing for BASF's construction chemicals business. It is reported that in order to become a bidder under BASF, the admission fee will be at least 3 billion euros ($3 billion 400 million) to qualify for the due diligence and final offer.

For this acquisition, Donald Quintin, President of lone star Europe, said: BASF's building chemicals business is very consistent with the investment portfolio of lone star. It supplements the investment of lone star in the building materials industry. The lone star attaches great importance to the knowledge and ability recognized by BASF building chemicals experts in the whole industry, and backed by the good performance of innovative products and the attractive research and development channels, the lonely star looks forward to pursuing the growth oriented business mode in common with Donald. "BASF"

It is reported that the signing of the agreement on BASF group's report will take effect immediately.

Back in January 1, 2019, sales and profits from the building chemicals division were no longer included in sales, EBITDA and EBIT before BASF group's special projects.

The figures for the previous year will be reissued accordingly (BASF group's sales redistribution in 2018: 60 billion 200 million euros; EBITDA reissued in 2018: 8 billion 970 million euros; the EBIT republication before 2018 special projects in 2018: 6 billion 281 million euros). Before delivery, the proceeds will be included in the post tax income of BASF group as a separate item ("after tax revenue").

In 2006, BASF bought construction chemicals business from Degussa at a price of 2 billion 700 million euros (including debt). Since its takeover, the sector has barely increased and its profit growth is not large.

Related industry analysts say that the business mode of the Department's service to a large number of small and medium-sized builders is contrary to BASF's concern for large industrial customers.