BASF and Solenis to join forces by combining paper and water chemicals businesses May 3, 2018 May 3, 2018 Ι BASF and Solenis to join forces by combining paper and water chemicals businesses 1
Cautionary note regarding forward-looking statements This presentation contains forward-looking statements. These statements are based on current estimates and projections of BASF management and currently available information. Future statements are not guarantees of the future developments and results outlined therein. These are dependent on a number of factors; they involve various risks and uncertainties; and they are based on assumptions that may not prove to be accurate. Such factors include those discussed in the Opportunities and Risks Report from page 111 to 118 of the BASF Report 2017. BASF does not assume any obligation to update the forward-looking statements contained in this presentation above and beyond the legal requirements. May 3, 2018 Ι BASF and Solenis to join forces by combining paper and water chemicals businesses 2
Creating a customer-focused global solutions provider for the paper and water treatment industries – transaction rationale Customer intimacy Technology expertise Services World-scale manufacturing ■ Application domain experts Markets and products ■ Digital solutions ■ Packaging Markets and products ■ Dry strength ■ Packaging ■ Paper coloration ■ Tissue ■ Municipal waste water treatment ■ Biocides ■ Wet and dry strength ■ Water treatment chemicals ■ Industrial water treatment May 3, 2018 Ι BASF and Solenis to join forces by combining paper and water chemicals businesses 3
BASF and Solenis to join forces by combining paper and water chemicals businesses Scope of transaction Facts about transaction Transaction comprises BASF’s global paper BASF will hold a 49% share of the combined entity; wet-end and water chemicals business 51% of the shares will be held by funds managed by (part of BASF’s Performance Chemicals division), Clayton, Dubilier & Rice including around 1,300 employees globally and Pro-forma sales of the combined business were production sites and plants* in the UK, the United around €2.4 billion in 2017 States, Mexico, India and Australia Financial terms of the transaction are not disclosed Solenis is a global producer of specialty Pending approval by the relevant authorities, closing chemicals for water intensive industries . is anticipated for the end of 2018 at the earliest With around 3,700 employees in 118 countries, Solenis offers a broad array of process, functional and water treatment chemistries as well as state- of-the-art monitoring and control systems * BASF’s paper wet-end and water chemicals production plants strongly embedded in the Verbund in Ludwigshafen, Germany, and Nanjing, China, are not transferred, and will deliver products and raw materials to the combined entity under mid- to long-term supply agreements. BASF’s paper coating chemicals portfolio is not part of the transaction. May 3, 2018 Ι BASF and Solenis to join forces by combining paper and water chemicals businesses 4
Facts and figures BASF’s paper wet-end and water chemicals business Headquarters Ludwigshafen, Germany Ownership and 100% owned and managed by management BASF in a global business unit ■ Bradford and Grimsby, UK ■ Suffolk, Virginia, USA ■ Production* Altamira, Mexico ■ Ankleshwar, India ■ Kwinana, Australia 2% 5% North America 17% 21% 28% EMEA 25% Employees on Sales 2017 Asia Pacific ~€0.8 billion Dec. 31, 2017 ~1,300 by region by region South America 42% 60% * BASF’s paper wet-end and water chemicals production plants strongly embedded in the Verbund in Ludwigshafen, Germany, and Nanjing, China, are not transferred, and will deliver products and raw materials to the combined entity under mid- to long-term supply agreements. BASF’s paper coating chemicals portfolio is not part of the transaction. May 3, 2018 Ι BASF and Solenis to join forces by combining paper and water chemicals businesses 5
Facts and figures Solenis ■ Wilmington, Delaware, USA Headquarters Wilmington, Delaware, USA R&D centers ■ Krefeld, Germany 100% owned by funds managed Ownership ■ Wilmington, Delaware, USA by Clayton, Dubilier & Rice Regional ■ Krefeld, Germany customer ■ Barendrecht, Netherlands John E. Panichella Management application ■ Shanghai, China CEO and President technology ■ Paulínia, São Paulo, Brazil centers Production 35 manufacturing sites globally 9% 16% North America 11% EMEA 35% Employees on Sales 2017 45% Asia Pacific ~€1.6 billion ~3,700 Dec. 31, 2017 18% by region by region South America 35% 31% May 3, 2018 Ι BASF and Solenis to join forces by combining paper and water chemicals businesses 6
Concept to ensure a smooth transfer following the closing of the transaction Closing Concept Until closing, BASF’s paper wet-end and water Following the signing, BASF will immediately set up chemicals business and Solenis will continue to a carve-out team operate as strictly independent companies At closing, BASF’s paper wet-end and water Pending approval by the relevant authorities, chemicals business will be integrated into Solenis closing is anticipated for the end of 2018 The combined entity will be headquartered in at the earliest Wilmington, Delaware , and will operate under the Following the closing, BASF will account for its Solenis name ; its current CEO will continue to lead 49% share in the combined entity under the the company; BASF will nominate three out of seven equity method in BASF’s consolidated financial shareholder representatives statements May 3, 2018 Ι BASF and Solenis to join forces by combining paper and water chemicals businesses 7
BASF’s paper wet-end chemicals and water treatment chemicals product portfolio Paper wet-end chemicals Municipal and industrial water treatment chemicals Process chemicals to optimize costs and increase Water chemicals used to purify raw water used for the machine efficiency as well as functional chemicals to lend production of drinking water, to treat waste water streams specific properties to finished paper and cardboard and industrial process water, to protect cooling towers, boilers and desalination plants Portfolio: dry strength agents, fixing agents, retention and drainage aids, deaerators, basic dyes, direct dyes, sizing Portfolio: flocculants, coagulants, defoamers, cleaners, agents, pigment preparations, wet strength agents and antiscalants, dispersants, corrosion inhibitor, formulations color developers additives May 3, 2018 Ι BASF and Solenis to join forces by combining paper and water chemicals businesses 9
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