Belgium's Solvay to split into two public companies

These generated about 4.1 billion euros ($4.50 billion) in net sales in 2021. A second company, temporarily known as SpecialtyCo, would include its materials business including specialty polymers, composites and solutions.

Belgium's Solvay will split into two independent public companies in 2023 focussed on chemicals and the other on specialty materials and solutions, it said in a statement on Tuesday.

Solvay reported record profits for 2021 in February, and had raised its dividend after reporting an 11th consecutive quarter of positive free cash flow generation. One company, known for now as EssentialCo, would comprise of Solvay's current chemicals and specialty chemicals business, including soda ash, peroxides and silica. These generated about 4.1 billion euros ($4.50 billion) in net sales in 2021.

A second company, temporarily known as SpecialtyCo, would include its materials business including specialty polymers, composites and solutions. These generated around 6 billion euros in net sales in 2021. "Notwithstanding the challenges of the current global environment, we are confident that pursuing this plan would enable us to create compelling value for shareholders over the long-term," CEO Ilham Kadri said in a statement.

The separation would be effected through a partial demerger of Solvay, with the specialty businesses spun off to SpecialtyCo. Solvay’s shareholders would retain their current shares of Solvay stock and receive shares in the new company on a pro rata basis. Both companies are expected to be listed on Euronext Brussels and Euronext Paris.

The transaction is expected to close in the second half of 2023, subject to market and regulatory conditions. No financial details were provided.

The group said the new company would have full financial flexibility to fund growth. The names for each company, the composition of the boards and management teams, will be provided at a later date.

Solvay's financial advisers are Morgan Stanley and BNP Paribas and its legal advisers are Cleary Gottlieb Steen & Hamilton and Linklaters. ($1 = 0.9111 euros)

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