Clariant to sell Masterbatches business for $1.6bn

Swiss speciality chemicals company Clariant said on Thursday that it has agreed to sell its Masterbatches business to US polymer group PolyOne for $1.6bn.

As previously announced, proceeds from the sale will be used to invest in innovations and technological applications within the core business areas, to strengthen Clariant’s balance sheet and to return capital to shareholders.

Executive chairman Hariolf Kottmann said: "This announcement is a significant milestone on our path to focussing on businesses with above-market growth, higher profitability and stronger cash generation. After the successful divestment of Healthcare Packaging in October 2019 the agreement to sell Masterbatches is an important step in delivering on our strategy defined in 2015 to concentrate on our three core business areas care chemicals, catalysis and natural resources.

"As announced, we are confident that we will execute the remaining divestment of our pigments business in 2020 in order to build the new, more focused and stronger Clariant by 2021."

The deal is expected to close by the third quarter of next year.

As a result of the divestment of the Masterbatches business and the anticipated divestment of the pigments business by the end of 2020, the board will propose an extraordinary dividend of CHF3 per share in cash at the annual meeting in March. If it is approved, shareholders will receive a CHF1bn payout.