Clariant has announced an updated strategy and financial outlook, as well as the signing of a memorandum of understanding with SABIC in regards to a “significant collaboration opportunity” for high-performance materials between the companies.
By 2021, following Clariant's creation of the high-performance materials division and the divestment of its remaining plastics and coatings division, Clariant anticipates significantly higher sales—around CHF 9 billion.
The compaby then hopes to collaborate with SABIC to combine Clariant’s additives and high-value masterbatches (color, high temperature resins and health care) and parts of SABIC’s specialties business to create a unified high-performance materials business.
Clariant will have the majority stake in the intended business combination. At the general meeting, scheduled for Oct. 16, 2018, it will be proposed to expand Clariant’s board to 12 members, of which four will be nominated by SABIC.
Clariant CEO Hariolf Kottman will be proposed as the new chairman of the board and, after he resigns as CEO on the same date, SABIC specialties executive vice president Ernesto Occhiello will be named CEO of Clariant.
The transaction is expected to take place towards the end of 2019, effective Jan. 1, 2020. The remaining plastics and coatings business—which includes pigments, standard masterbatches and medical specialties—is to be divested by 2020.
“Clariant is a strong company with an impressive track record which will continue on its successful path with Hariolf Kottmann as the new chairman,” said SABIC CEO Yousef Al-Benyan. “Specialty chemicals are an important building block for SABIC’s strategy. We see ourselves as a responsible long-term oriented strategic shareholder, and the governance agreement underlines our commitment to create value for all stakeholders.”
Additionally, the company undertook a strategic review and announced new targets for each business area for 2021. Care chemicals is expected to grow above the market at an accelerated pace due to innovation in renewable and natural products, as well as entry into new market segments. Consumer care, including personal care, home care, crop solutions and health care, will be the main drivers of the segment’s expansion strategy.
“The portfolio upgrade together with the continuation of Clariant’s strategy enables the Group to realize a significant step change into higher value specialties, which will allow the Group to considerably augment value creation for all our stakeholders,” said Kottmann.