12:27 PM | February 14, 2013 | Ian Young
Rockwood Holdings has agreed to acquire Kemira's 39% stake in the companies' Sachtleben (Duisburg, Germany) titanium dioxide (TiO2) joint venture for €97.5 million ($130 million). The deal is expected to close by 19 February. Kemira says it will include in its accounts a one-off write-down of about €25 million related to the transaction, which will impact the company's Ebit in the first quarter of 2013.
The transaction is likely a prelude to Rockwood splitting Sachtleben from the rest of Rockwood, possibly by selling Sachtleben. Rockwood and Kemira announced last year that they were exploring options for Sachtleben, including a potential sale. "Given our prior statements that the titanium dioxide business is noncore, it is our key objective this year to explore and execute on the best strategic option for Rockwood," Rockwood chairman and CEO Seifi Ghasemi says. "Attaining 100% ownership of the joint venture provides us with the flexibility to achieve this goal in the time frame and manner most optimal for maximizing shareholder value."
"Ever since establishing Sachtleben in September 2008, we have clearly communicated that this is a noncore asset for Kemira," says Kemira president and CEO Wolfgang Büchele. "We are now able to finalize the exit of the business in a manner that is a good fit for both parties of the joint venture."
Kemira confirmed last week that a poor performance by Sachtleben, due to a declining TiO2 market, caused Kemira's fourth-quarter 2012 earnings to miss analysts' expectations. Rising costs and weak demand eroded TiO2 industry margins heavily last year. Sachtleben has about 340,000 m.t./year of production capacity across 3 plants.