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Mergers & Acquisitions

Clariant selling masterbatch unit to PolyOne

$1.6 billion deal ends drama over what would become of the unit

by Marc S. Reisch
January 3, 2020 | A version of this story appeared in Volume 98, Issue 1


A photo of a Clariant masterbatch plant.
Credit: Clariant
A Clariant masterbatch plant in Mexico

The specialty chemical maker Clariant has agreed to sell its entire masterbatch business to PolyOne for $1.6 billion. The deal, expected to close by the end of September 2020, ends the drama over what would become of the business.

Masterbatches are plastic pellets full of color and additives that are blended during polymer processing. The purchase would add $1.2 billion in annual sales to PolyOne’s $2.9 billion, creating a $4 billion-plus polymer materials and services firm. The Clariant business includes 46 manufacturing and technology operations in 29 countries with about 3,600 employees.

PolyOne CEO Robert M. Patterson says the deal will be “transformational.” He adds that PolyOne expects about 85% of its earnings to come from specialty applications when the sale closes, versus 66% in 2015.

According to Clariant chairman Hariolf Kottmann, the sale will clear the way for the company to concentrate on its personal- and home-care chemical, catalyst, and natural resource businesses. It also moves an unsettled period closer to an end.

The Swiss firm had planned to merge with Huntsman in 2017 but abandoned the deal because of opposition from activist investors. In January 2018, Saudi Arabia’s Sabic bought the activists’ 25% stake in Clariant for $2.4 billion.

The turbulence continued after Clariant and Sabic devised a plan to move the high-value part of the masterbatch business into a materials joint venture with Sabic. The two firms marked Clariant’s standard masterbatch operation and its pigment business for sale. Plans for the venture, which would have included Sabic’s Ultem and Noryl engineering polymer operations, fell apart at the end of July 2019. Sabic blamed deteriorating market conditions.

With the entire masterbatch operation now going to PolyOne, Clariant is reviving plans to pay shareholders a cash distribution—$1 billion—when the deal closes. Shareholders will vote on that proposal during the firm’s annual meeting at the end of March. Separately, Clariant expects to sell the pigment business by the end of 2020.



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