Evonik sells methacrylates business for €3bn

EVONIK is selling its methacrylates business to private equity firm Advent International for €3bn (US$3.39bn).

The sale is part of the German company’s effort to focus on less-cyclical specialty chemicals. The business produces a portfolio of monomers used as building blocks in the production of a wide range of products including plastics, coatings, and adhesives.

The business has 18 production sites and employs 3,900 people worldwide. The sale, which includes the company’s methacrylates, acrylic products and cyanide business lines, is expected to close in Q3 this year.

Evonik announced in 2017 that it was testing a new process for producing methyl methacrylate (MMA) using C2 feedstocks, that has high yields, low energy requirements and produces significantly less wastewater than conventional processes.

A principal use of the monomer methyl methacrylate is the production of polymethyl methacrylate – marketed by producers under more familiar brand names including Plexiglas and Perspex, a rigid polymer used in glazing, light fittings and LCD TV panels.

The move towards using C2 feeds follows in the footsteps of BASF, which was the first to shift production away from C3 and C4 routes that have dominated production. The consultancy Nexant noted last year that a plant being built in Saudi Arabia by SABIC and Mitsubishi Chemical that uses Lucite’s Alpha technology to convert C2 feeds into MMA is expected to be the most cost-competitive in the world and may put competitive pressure on other players in the market. Though Nexant noted that while commercialisation of Evonik’s technology is viable, it may be hampered by timings with other C2 plants already coming online in regions with cheap C2 feedstocks.

Evonik says it will use the proceeds from the sale to fund its US$625m purchase of US hydrogen peroxide manufacturer PeroxyChem and to build a new polyamide plant in Marl, Germany.