Lone Star Funds to acquire BASF’s Construction Chemicals business

An affiliate of Billionaire John Grayken’s Lone Star Funds agreed to buy BASF SE’s construction chemicals business for €3.17 billion ($3.5 billion)

The purchase price on a cash and debt-free basis is €3.17 billion ($3.5 billion). The transaction is expected to close in the third quarter of 2020, subject to the approval of the relevant competition authorities.

“Our aim was to find a new home for our Construction Chemicals business where it can leverage its full potential,” said Saori Dubourg, member of the Board of Executive Directors of BASF SE who is responsible for the Construction Chemicals business. “Under the umbrella of Lone Star, the Construction Chemicals team can focus on a growth path with an industry-specific approach.”

“BASF’s Construction Chemicals business fits very well with our portfolio, complementing our investments in the construction materials industry,” said Donald Quintin, president of Europe at Lone Star. “We highly value the industry-wide recognised knowledge and competence of BASF’s Construction Chemicals experts, backed by a strong track record in innovative products and a compelling R&D pipeline. We look forward to jointly pursuing a growth-oriented business approach.”

With more than 7,000 employees, BASF’s Construction Chemicals business operates production sites and sales offices in more than 60 countries and generated sales of about €2.5 billion in 2018.

The signing of the agreement has an immediate effect on the reporting of BASF Group: Retroactively as of January 1, 2019, sales and earnings of the Construction Chemicals division are no longer included in sales, EBITDA, and EBIT before special items of BASF Group.

The prior-year figures will be restated accordingly (BASF Group sales 2018 restated: €60.2 billion [$66.72 billion]; EBITDA 2018 restated: €8.97 billion [$9.94 billion]; EBIT before special items 2018 restated: €6.281 billion [$6.96 billio]). Until closing, earnings will be presented in the income after taxes of BASF Group as a separate item (“Income after taxes from discontinued operations”).