Brazil's Braskem buys Solvay Indupa

Solvay has signed a binding agreement with Braskem, Brazil's leading PVC producer, to sell its 70.59% stake in Solvay Indupa. The transaction is based on a total enterprise value of $ 290 million (Euro 211 million), representing 5.1 x mid-cycle REBITDA. The enterprise value includes Solvay Indupa's net financial debt, which was accounted for in Solvay's ‘Assets and Liabilities held for sale’ at year-end 2012 for Euro 178 million. The cash proceeds for Solvay's equity stake are to amount to $ 25 million (Euro 18 million).
 
"This divestment is part of Solvay's strategic portfolio management. It will reduce the Group's exposure to the economic cycle and to energy-intensive businesses, allowing Solvay to achieve higher growth, higher returns and lower capital intensity. As part of Braskem, Solvay Indupa will enjoy ready access to raw materials and energy which will enhance its position in a competitive and growing market. This will allow Solvay Indupa to develop its activities sustainably in Latin America for the benefit of both its customers and employees,” said Jacques Van Rijckevorsel, member of Solvay's executive committee.
 
Created in 1948, Solvay Indupa, which is South America's second largest PVC producer and fourth largest caustic soda producer, has two production sites in Argentina and Brazil.