French chemical maker Arkema said on Tuesday it had agreed to buy the performance adhesives business of Ashland Global Holdings in a deal valuing the unit at $1.65 billion including debt.
Arkema said the unit would combine with its adhesives subsidiary Bostik to give “one of the most complete offerings in the pressure sensitive adhesives sector.”
“The acquisition of Ashland’s adhesives business is a fantastic opportunity to reinforce the group’s presence in the U.S. and to accelerate Bostik’s growth,” Arkema Chief Executive Thierry Le Henaff in a statement.
Ashland expects the cash deal to bring net proceeds of around $1.2 billion to $1.3 billion and close by the end of the year, subject to regulatory approvals.
Arkema expects the deal to be accretive from the first year of integration and boost its net earnings per share by 1 euro ($1.18) by 2026.
Arkema hiked its adhesives business 2024 profit target on the back of the deal. It now projects an earnings before interest, taxes, depreciation and amortization (EBITDA) margin above 17% from sales of over 3 billion euros.
It estimated it could find more than $45 million in pre-tax synergies, which it would implement over the next five years.
Ashland’s performance adhesives business employs around 330 people and operates six production plants, mainly in North America, it added.
Source: Reuters.com