Swiss specialty chemicals company Clariant AG (CLZNF.PK,CLZNY.PK) on Thursday said it has signed an agreement to divest its Textile Chemicals, Paper Specialties and Emulsions businesses to US-based private investment firm SK Capital for about 502 million Swiss francs. Out of the total consideration, approximately 460 million francs will be in cash.
Clariant said the boards of both companies has approved the divestment, which would close by the end of the second quarter of 2013, subject to regulatory approvals.
Earlier in June, Clariant had said that it was evaluating strategic options for Textile Chemicals, Paper Specialties, and Emulsions, Detergents & Intermediates business units, to be implemented during the next 18 months. Clariant then said it plans to generate over 70 percent of its sales in future with core non-cyclical business units as it aims to grow its EBITDA margin to above 17 percent in 2015 from 13.2 percent it achieved in 2011.
The company said it will consider its Business Unit Leather Services and the Business Line Detergents & Intermediates in the second phase of the process.
According to the company, repositioning its portfolio is an essential part of its profitable growth strategy. Aiming to achieve its 2015 targets, Clariant today said it will focus on markets with future perspectives and strong growth rates and on businesses that have a competitive position, resulting in strong pricing power.
Clariant CEO Hariolf Kottmann said, "For Clariant the transaction marks a significant milestone in the execution of its profitable growth strategy, after the acquisition of Süd-Chemie in 2011. By the end of 2013, Clariant will be an even more profitable company than today, generating a majority of sales in non-cyclical growth businesses."
In 2012, the company expects that the divested businesses would generate an estimated 1.2 billion francs in sales, equaling approximately 15 percent of total Group sales, and an estimated EBITDA of 80 million fancs. The three businesses employ around 3,000 employees, representing around 14 percent of total workforce, in 35 countries.
Barry Siadat, a Managing Director of SK Capital, noted, "We are delighted to partner with the management and employees of these businesses to build upon their strong technology, brand, and leading market positions to more efficiently serve their large and growing global markets and customers. We believe these businesses provide an attractive platform to capitalize on their overlaps in technology, manufacturing, supply chain and logistics."
In U.S., CLZNY.PK closed its trading on Wednesday at $12.73, up $1.23 or 10.70 percent.
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