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Food & Beverage

Solvay Agrees to Buy Rhodia for $4.8 Billion

April 04, 2011
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Solvay, the Belgian soda ash maker, has agreed to buy Rhodia SA of France for 3.4 billion-euro ($4.8 billion) in cash to add specialty chemicals spanning ingredients for moisturizers and car-part polymers, reports Bloomberg. Shareholders of the Paris-based company will receive 31.6 euros a share, 50 percent more than Rhodia’s closing price on April 1, Solvay said in a statement. Including debt, the deal has an enterprise value of 6.6 billion euros. Solvay, which exited pharmaceuticals in a 5.2 billion-euro deal, moved on Rhodia after being outbid by DuPont Co. for food- ingredient maker Danisco A/S this year. Chief Executive Officer Christian Jourquin seeks to diversify Solvay away from the commoditized markets of caustic soda, soda ash and PVC. The addition of Rhodia will create a company with 12 billion euros in revenue, 40 percent generated in emerging markets. Solvay is paying 7.3 times recurring earnings before interest, taxes, depreciation and amortization. That’s in line with the average multiple for specialty chemical acquisitions, according to data compiled by Bloomberg. The company sees the possibility of doubling its earnings to almost 2 billion euros.

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