BASF and Solvay have found a buyer for Solvay’s European nylon 6,6 business: the German nylon 6 producer Domo Chemicals, which will buy the assets for about $335 million, not including debt.
The European Commission approved BASF’s $1.8 billion purchase of Solvay’s global nylon 6,6 business in January. But given that the nylon 6,6 industry is already concentrated, with only a handful of players, the EC demanded that the companies sell off the bulk of Solvay’s European nylon 6,6 assets.
Included in the sale to Domo are polymer and intermediate operations in France, Spain, and Poland; engineering plastics plants in France and Poland; and a nylon fiber plant in France. BASF will also form a joint venture with Domo to produce the nylon 6,6 raw material adipic acid.
Not included in the deal is Solvay’s interest in an adiponitrile joint venture with Invista in France. Back integrating into this nylon 6,6 precursor was one of BASF’s main motivations for the deal. BASF will also get all of Solvay’s nylon assets outside Europe. In all, the operations that BASF is obtaining generate sales of $1.1 billion annually.
Domo is a fully integrated nylon 6 producer. At a plant in Leuna, Germany, Domo makes nylon 6 and its main raw material, caprolactam, as well as the precursors cyclohexanone, phenol, and cumene. The company says the Solvay acquisition will boost its sales by nearly $800 million to almost $1.8 billion annually. It will gain about 1,100 employees.
Alex Segers, Domo’s CEO, calls the acquisition a “major step forward” for the company.
The transaction and BASF’s purchase of the Solvay business are expected to be completed by the end of the year.