In December 19, many international chemical giants including BASF and Clariant issued announcements to sell or transfer some of their own business. Driven by the general environment, in 2019, especially in the fourth quarter of that year, Evonik, LANXESS, Arkema, Huntsman, Xuanwei and other international chemical giants announced similar decisions. The plant, equipment, and even the equity of subsidiaries have been divested, sold, etc., and strive to transform and upgrade to improve the poor profitability.
Only in the fourth quarter of 2019, news of the international chemical giant's sale of business continued to emerge. BASF announced the sale of its construction chemicals business to Lone Star Fund, a US private equity firm, for € 3.17 billion. Clariant also agreed to sell its previously announced masterbatch business to PolyOne with a transaction value of $ 1.56 billion. The business adjustments of these two companies have also received extensive attention from the global industrial community.
In addition to the highly-regarded business adjustments of BASF and Clariant, other international chemical giants have also made relevant moves. In the fourth quarter of 2019, Flow USA announced the sale of its tile coatings business to a Spanish pigment company. DuPont sells its nutrition and biosciences division to International Flavors & Fragrances (IFF) for $ 26.2 billion. Xuanwei completed the asset sale of a wholly-owned subsidiary in Zhaoqing, China. Kansai Paint Co., Ltd. sold its joint venture in China and closed a plant in China, and plans to stop Kansai Paint Europe Co., Ltd. LANXESS sold 74% of its Rustenburg chrome mine in South Africa to South African chrome powder supplier Clover Alloys. Covestro officially completed the sale of the European polyurethane system materials business to H.I.G. Capital. Arkema announced that it intends to divest its functional polyolefin business to SK General Chemicals, while Arkema is further transforming into specialty chemicals and advanced materials. In the fourth quarter of 2019, the business adjustment of chemical companies was almost "everyone has a share".
In addition, there were many high-profile business sale cases in the third quarter of 2019, such as the sale of BASF's ultrafiltration membrane business to DuPont and the sale of pigment business to DIC. Covestro also signed an agreement to sell its European polycarbonate sheet business to Serafin Group.
It is always common for international companies to adjust their business, and many companies also have their own business adjustment plans. However, such concentrated business adjustments are not uncommon, and they are in stark contrast to the large-scale mergers and acquisitions of international companies. In fact, the centralized business adjustment is a reflection of the poor profitability and shrinking profits of international companies, and it is also a microcosm of the overall economic situation in 2019 being less than expected.
Starting from the second quarter of 2019, due to the impact of the world economic situation, many international chemical giants are not profitable. There are countless companies whose indicators such as net profit and sales have decreased compared with the same period in 2018. BASF, DuPont, Tao Similar situations have occurred in Shishi, Mitsubishi Chemical Holdings and other companies. The second quarter of 2019 report released by chemical companies shows that the sales of chemical products have fallen almost across the board, the industrial chemicals sector is in trouble, and the sales of commodities such as automobiles, housing and high-end electronic products have also been seriously affected, resulting in a variety of consumption. Chemical sales were also lower than expected. In the third quarter of 2019, this situation did not improve much. BASF, LANXESS, Clariant and other companies recorded financial reports of a slight decline in net profit in the third quarter.
The decline in profits and rising costs have caused international chemical giants to begin to cut costs and accelerate transformation. For example, BASF's plan for the divestiture of pigments and building chemicals already exists. The company's CEO, Mu Mule, stated in the fall of 2018 that its chemical building materials business had no obvious coordination effect with other business areas, and its profitability was not as expected. The business. Many companies, including LANXESS and Clariant, have always been pursuing high-yield businesses. However, the concentration of corporate decisions in December 2019 not only reflects the decisiveness of the above-mentioned companies' corporate strategy, but also reflects the urgency of transformation brought about by the overall economic situation.
If the transformation strategy is implemented, the international chemical giants will have better development opportunities. After selling the masterbatch business, Clariant's Executive Chairman Guo Haili said: "Clariant's focus on the road above market growth, higher profitability and stronger cash generation, this transaction is an important milestone for Clariant's business development." Assert that Clariant's future will be newer, more focused, and more powerful.
