BRUSSELS—Belgium-based chemicals company Solvay SA on Wednesday
said it is buying U.S. counterpart Cytec Industries Inc. for $5.5
billion to boost its product offering.
Solvay said it would pay $75.25 a share for Cytec and finance
the deal by raising €1.5 billion ($1.66 billion) of capital and
issuing €1 billion of hybrid instruments and senior debt.
The company said the acquisition would make it the world's
second-largest company for aeronautical composite materials and
reinforce its advanced materials and advanced formulations
platforms, which produce chemicals used in the aerospace,
automotive and mining sectors.
Cytec is based in New Jersey, has 4,600 employees and generated
revenue of $2 billion last year, mostly in North America and the
Europe, Middle East and Africa region.
"It is a unique opportunity for Solvay to boost its customer
offerings in lightweighting with advanced materials in aerospace
and automotive, as well as to strengthen its know-how with
activities in mining chemicals," Solvay Chief Executive Jean-Pierre
Clamadieu said.
Solvay said the per-share purchase price is 29% above Cytec's
closing share price Tuesday and that the deal had been recommended
unanimously by both companies' boards of directors.
Cytec's CEO Shane Fleming welcomed the deal. Solvay's "strategic
focus is perfectly aligned with our businesses, while the
technology synergies with their specialty polymers and formulations
expertise should accelerate our growth," he said.
Solvay said it expected the deal to close in the fourth
quarter.
News of the deal came as Solvay said it swung to a net profit of
€143 million in the second quarter, compared with a €292 million
loss a year earlier. The year-earlier result had been hit by an
impairment charge on Solvay's discontinued European Chlorovinyls
business.
Sales rose 4.2% to €2.68 billion, as currency fluctuations
helped offset lower volumes and prices, Solvay said.
Write to Gabriele Steinhauser at
gabriele.steinhauser@wsj.com
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