The French chemical maker Arkema has offered to buy the adhesives producer Bostik from Total for $2.2 billion. Total, a French oil company that has been gradually exiting the chemical business, has granted Arkema an exclusivity period to pursue the offer.
Bostik is the world’s third-largest adhesives maker after Henkel and H.B. Fuller, according to an Arkema presentation released after the deal was announced. It has 4,900 employees and annual sales of $2 billion from adhesives sold in industrial, construction, and consumer markets.
The proposed purchase is a “major milestone” in Arkema’s strategy, under way since the firm was formed in 2006 as a spin-off from Total, to transform itself from a producer of commodity chemicals to one making specialties, Arkema CEO Thierry Le Hénaff says. The acquisition would increase Arkema’s annual sales to $10 billion and its employee headcount to 19,000. Profit margins and sales growth would also rise, Le Hénaff adds.
Jürgen Wegner, a vice president at the consulting firm ChemQuest, doesn’t anticipate regulatory scrutiny of the deal, but he doesn’t see a perfect fit either. “Since Arkema has little business with adhesive and sealant formulators, I do not see any sizable conflict of interest,” he says. “On the other hand, Arkema has little to no experience with Bostik’s technology and market penetration; thus synergies between the two businesses will be rather limited.”
As a result of the proposed acquisition, Arkema now plans to divest noncore businesses with combined sales of just under $650 million per year, a hike on its previous plan.