Japan’s DIC to acquire BASF’s global pigments business
DIC Corporation, one of Japan’s most diversified chemical companies and the core of the DIC Group, has entered into a definitive agreement to acquire BASF’s global pigments business, known as BASF Colors & Effects. The price tag is EUR1.15 billion (USD1.2 billion). DIC will pay EUR985 million (USD1.09 billion) to BASF and take on the unit’s net debt, which accounts for the rest of the sale price.
The acquisition will broaden DIC’s portfolio as a global manufacturer of pigments, including those for electronic displays, cosmetics, coatings, plastics, inks, and specialty applications, by creating a world-class pigments supplier that offers customers an even wider range of versatile solutions.
“Our acquisition of BCE brings together complementary resources and expertise of two recognized leaders in innovation, product stewardship, regulatory leadership, application support, and manufacturing,” said Kaoru Ino, president and CEO of DIC. “We have outlined a clear growth path for DIC with the target to increase our sales to JPY1 trillion (USD9.4 billion) by 2025. In this context, BASF’s pigments portfolio is an important strategic addition in meeting our goals more expeditiously. It will allow us to expand our offering as one of the leading pigment suppliers globally and provide our customers even more versatile solutions.”
“We have achieved our goal to find an owner who considers pigments a core strategic business,” said Markus Kamieth, member of the Board of Executive Directors of BASF SE responsible for the Industrial Solutions segment. “DIC pursues ambitious growth plans and has announced to further develop the business in the coming years. We are convinced that the pigments business will be able to unfold its full potential within DIC.”
The acquisition offers a unique opportunity to combine complementary know-how and best practices to develop ground-breaking innovative solutions for the marketplace. With more than 30 pigment production facilities worldwide between DIC and BCE, the company’s pigment portfolio will be able to offer broader product categories related to effect pigments, inorganic pigments, organic pigments, specialty dyes, and pigment preparations.
“The acquisition of BCE is extremely ideal within the DIC pigments business, due to the complementary regional footprint and product portfolio. It is a strategic partner for DIC who aims for high growth and high added value by expanding functional pigments into niche applications. By combining the technological capabilities of both companies, we will continue to create new value and provide it to the market as a leading company in the pigment business,” said Yoshinari Akiyama, DIC executive officer and general manager of the Color Material Products Division.
“As a long-standing business partner of BASF, we value the expertise and engagement of BASF’s employees in the pigments business,” said Myron Petruch, DIC executive officer and president and CEO of Sun Chemical, a subsidiary of DIC Corporation. “The move improves our pigment footprint in Europe and underscores our commitment to delivering solutions tailored to meet the needs of our customers. It also allows us to compete in the global marketplace more effectively going forward.”
In the immediate future, business for customers will remain the same as usual. The expected closing date of the sale is the fourth quarter of 2020, subject to the receipt of regulatory approvals.
White & Case LLP served as legal counsel and Morgan Stanley served as financial advisor to DIC.