Solvay (Brussels) and Rhodia (Paris) have signed a framework agreement where Solvay would acquire 100% of the share capital of Rhodia at €31.60 per share with the intent of creating one new group with sales of €12 billion and REBITDA of €1.9 billion. The offer was unanimously recommended by Rhodia's board of directors.
The creation of a new group reportedly will accelerate the shared ambition to create a large global chemical company committed to sustainable development. The new group will capitalize on a large geographic footprint, the quality and balance of its portfolio and the solidity of its financial base to fully capture new growth opportunities, especially in high-growth markets.
The new group's strategy is based on the following strengths: Solvay is a leader in high performance specialty polymers, in soda ash and hydrogen peroxide, while Rhodia holds leadership positions in specialty materials (silica, rare earths), products for consumer markets (surfactants, natural polymers, acetate tow) and engineering plastics based on polyamide 6.6. Future geographic expansion will be driven by a significant presence in the emerging markets, which already generate 40% of sales of the combined group. The complementary nature of the industrial activities of Rhodia and Solvay should provide the combined group with a balanced presence in its different market segments: specialty chemicals for consumer goods, construction, automotive, energy, water, environment and electronics.
According to Solvay, no major downsizing is planned in the context of this combination. To facilitate a smooth and rapid integration of the two groups, Jean-Pierre Clamadieu, chairman and CEO of Rhodia, will join Solvay’s executive committee in the role of deputy CEO once the offer is closed. Clamadieu also will succeed Solvay’s current CEO Christian Jourquin upon his retirement. In this context, Clamadieu will be proposed for appointment to the board of directors of Solvay at the AGM in May 2012. In addition, Gilles Auffret, COO of Rhodia, will be appointed CEO of Rhodia and member of the executive committee of Solvay.
The offer is conditional upon the approval by EU and US anti-trust authorities and upon a minimum acceptance level of 50% plus one share, will be filed in the coming days. Solvay expects that the offer will close by late August 2011. Upon reaching a 95% acceptance level, Solvay reserves the right to conduct a squeeze-out of the remaining shares.