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Fri 4 Oct 2019 11:51 AM

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Saudi-backed Clariant said to mull $1.5bn sale to PolyOne

The Saudi Basic Industries Corp. is Clariant's anchor investor

Saudi-backed Clariant said to mull $1.5bn sale to PolyOne

Swiss chemicals maker Clariant AG is in talks to sell a plastic additives unit to US specialty materials maker PolyOne Corp., people with knowledge of the matter said.

Clariant has been seeking about $1.5 billion for its Masterbatches business, which makes colorants and optical brighteners for polymers, according to the people.

While discussions with PolyOne are the most advanced, the sale has also attracted interest from other companies as well as private equity firms, the people said, asking not to be identified because the information is private.

Like other chemical makers, Clariant has been grappling with a slowdown in some of its markets including the automotive industry. That’s made it more difficult for Clariant to settle on terms of a deal for the Masterbatches business, given the uncertainty over how much earnings will be hit, the people said.

Shares of Clariant gained as much as 3 percent and traded 2.1 percent higher at 19.51 francs as of 4:48 p.m. in Zurich. PolyOne declined 1.4 percent to $30.43 in New York.

Acquiring Masterbatches would make PolyOne, based outside Cleveland, a world leader in supplying color concentrates for plastics. No final decisions have been made, and there’s no certainty the deliberations will lead to a transaction, the people said.

A representative for Muttenz-based Clariant and an official at PolyOne declined to comment.

The potential sale of Masterbatches is a sign that Clariant Chairman Hariolf Kottmann is pushing ahead with a strategy overhaul despite strained relations with its anchor investor, Saudi Basic Industries Corp. Sabic’s pick for chief executive officer of the Swiss firm, Ernesto Occhiello, resigned in July after nine months in the role as talks over a plastics joint venture between the two companies unraveled.

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