Solvay will separate into SpecialtyCo with accelerated growth potential and EssentialCo with resilient cash generation.
Solvay has recently announced that it will separate its businesses into the two independent publicly listed company EssentialCo and SpecialtyCo. EssentialCo would comprise the mono-technology businesses of Ash, Peroxides, Silica, Coatis and the other Chemicals segment, while SpecialtyCo would comprise the Materials segment, including Specialty Polymers, Novecare, Technology Solutions, Aroma Performance and Oil & Gas.
The transaction, subject to general market and customary closing conditions, is expected to be concluded in the second half of 2023. Upon completion, the separation would establish two separate companies that will focus on their distinctive business models and strategies, market and stakeholder priorities.
“The plan to separate into two leading companies represents a pivotal moment in our journey to transform and simplify Solvay. Since we first launched our G.R.O.W. strategy in 2019, we have taken a number of actions to strengthen our financial and operational performance, focus our portfolio on higher growth and higher margin businesses, and reinforce our business purpose across the organization. We have changed the culture profoundly, with a passion for performance and meritocracy at its core. Our successful focus on cash, costs, and returns has strengthened the Materials and Solutions segments to be more self-sustaining and profitable. At the same time, the Chemicals segment has continued its strong track record of resilient cash generation. 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,” stated said Ilham Kadri, the CEO of Solvay. “Our talented and dedicated employees have worked hard to transform Solvay, and their efforts have enabled us to take this important next step towards the creation of two strong companies. We expect to create opportunities in each company for our employees to thrive and grow, and we are confident that both companies will maintain the same levels of customer focus and commitment to value creation.”
“Today's news is an important milestone for Solvay. In the last decade, Solvay has undergone major evolutions and the transformation has accelerated under Ilham’s leadership with a focus on profitable growth and simplifying the Company, all while driving innovation and raising the bar in sustainability. This exciting announcement marks the next phase of the transformation. On behalf of the entire Board, we look forward to guiding Solvay’s next chapter of sustainable value creation for shareholders, customers and employees,” also added Nicolas Boël, the chairman of the Board of Directors of Solvay.
EssentialCo
EssentialCo will strengthen its operating model by enhancing the cost leadership and maximising resilient cash generation. For this purpose, it will focus on consolidating and expanding business opportunities in several end markets such as building, consumer goods and automotive, especially in the Asia-Pacific region. The company will also pursue the growth of its natural soda ash, sodium bicarbonate and peroxide market segment. In addition, EssentialCo aims to become carbon neutral before 2050.
SpecialtyCo
SpecialtyCo will be committed to a strong investment-grade rating. Expected to become carbon neutral by 2040, it will then be focused on providing value-added solutions to support a more sustainable world through two different business line:
- Materials, with a portfolio based on high-performance polymer and carbon fibre composite technologies for electronics, transportation, healthcare and digitalisation.
- Consumer & Resources, to provide biobased, natural and circular solutions.