30 October 2006 – Rhodia has agreed to sell its silicones business to China National Blue Star Corporation in a deal the group says is in line with its strategy of focusing on sectors of global leadership positions.
According to the French chemicals group, the price is based on an enterprise value of ˆ400m representing a multiple of slightly more than 7 times last year’s recurring EBITDA.
Rhodia Silicones turned over ˆ417m in 2005 and employs 1200 people, largely at sites in St Fons and Roussillon, in France. The portfolio includes silicone elastomers, LSR and RTV type materials.
News of the planned sale, which emerged during a top level French business delegation to China led by Jacques Chirac, reportedly surprised the French president who expressed concern over job prospects under the new owner. However, China National Blue Star responded quickly to reassure employees of the security of their employment.
The Rhodia deal is the third by China National Blue Star outside the country this year; in April, the $4bn state-owned business bought Qenos, Australia’s biggest ethylene maker. Ownership of the Rhodia business is estimated to put the new owner in third place in the world silicones market behind Dow Corning and Wacker, who are currently cooperating on a massive $600m investment in China.
