Clariant, Ashland To Sell German Chemicals JV To Rhône For CHF 310 Mln - Update

(RTTNews) - Swiss specialty chemicals maker Clariant AG (CLZNY.PK, CRN.L, CLZNF.PK) and its US peer Ashland Inc. (ASH) announced Wednesday their agreement to sell their German joint venture, ASK Chemicals, to investment funds affiliated with Rhône, a London and New York-based private equity investment firm.

In the deal, the enterprise value before debt and assumed liabilities amounts to 310 million Swiss francs or 257 million euros. Total pre-tax proceeds would be about 180 million francs or 149 million euros, after adjusting for debt and assumed liabilities. This includes 155 million francs or 128 million euros in cash and a 25 million francs or 21 million euros buyer note.

Clariant said the proceeds will be split evenly between Ashland and Clariant under terms of the 50/50 joint venture.

The transaction would close during the third quarter 2014, subject to customary closing conditions, including regulatory approvals.

Clariant is a foundry chemicals manufacturer with 1,800 employees and operations in 25 countries. Its portfolio includes foundry resources such as binders, coatings, feeders, filters and release agents, as well as metallurgical products. In fiscal 2013, ASK Chemicals generated revenues of 513 million euros.

Clariant CEO Hariolf Kottmann said, "The divestment of our stake in ASK Chemicals is part of our continuous active portfolio management to reallocate capital towards our more profitable growth areas. In the joint venture we have successfully combined the activities of Ashland and former Süd-Chemie businesses. Now we release it to a new owner who will focus on growth perspectives."

Ashland Chairman and Chief Executive Officer James O'Brien said the sale would allow the firm to focus on core specialty chemicals business, as it is being repositioned for sustained sales and profit growth.

On Tuesday, Clariant shares closed trading at 17.41 francs, down 0.09 francs or 0.51 percent, while Ashland settled at $96.52, up $2.10 or 2.22 percent.