Japanese printing ink maker DIC Corp said yesterday it was buying German chemicals group BASF’s pigments business for €1.15bn ($1.3bn), to gain a broader footprint in Europe. DIC, whose products include liquid crystals for flat screens as well as metallic pigments, said it would pay €985mn to BASF for the business – which produces pigments for paints, coatings and cosmetics – and would take on the unit’s net debt which accounts for the rest of the agreed sale price. DIC’s subsidiary Sun Chemical already acquired Bayer’s pigments business in 2003. The BASF deal will help the Japanese group achieve a goal of ¥1tn ($9.5bn) in total annual group sales by 2025, up from ¥805.8bn last year, it said.
“BASF’s pigments portfolio is an important strategic addition in meeting our goals more expeditiously,” DIC chief executive Kaoru Ino said in a statement. DIC will gain European plants, to complement its mainly Asia and North America-based operations, as well as products such as pearlescent pigments for cosmetics and better access to customers in the car industry, it said. BASF in February unveiled plans to put the unit – with about €1bn in sales and about €120mn in core profit – up for sale, seeing little potential for the business to differentiate itself from rivals. It is also selling a construction chemicals unit, whose dependence on mid-size builders is at odds with BASF’s focus on large industrial customers, and it separately plans to list oil and gas business Wintershall DEA.
Swiss peer Clariant earlier this year also began the sale of its pigments business under a wider streamlining effort. Private equity groups had been among the suitors for the BASF unit, some of them with a view to potentially combining it with the Clariant business, people familiar with the sector have said. DIC said it expects to close the purchase by the end of 2020.
Sources and photo-credits: Gulf Times, Reuters