A major deal between international chemical specialists is likely to impact the operations of an admixtures business in Australia and New Zealand.
UK-based chemicals company, INEOS Enterprises, has agreed to acquire MBCC Group’s admixtures business from Swiss-based firm, Sika.
Sika’s divestment includes admixtures assets in the US, Canada, Europe, the UK as well as the entire operation in Australia and New Zealand. This business employs more than 1,600 people which produce and supply a broad chemicals portfolio for concrete manufacturing and underground construction.
Chemical admixtures are reported to be an essential component in the production of concrete and cement, used to chemically modify its properties.
The divestment is part of the required remedy process in Sika’s acquisition of MBCC Group. The Disposal Perimeter generated net sales of around $1.4 billion by the end of 2022.
Sika also provides sealants, structural adhesives and ‘sound deadening’ solutions for vehicle manufacturers.
“The agreement with INEOS Enterprises marks a key milestone in Sika’s acquisition of MBCC Group,” said Sika CEO, Thomas Hasler.
“I am convinced that we have found a long-term home for the MBCC Group’s admixture business.
“The perfect new owner who will further develop the business together with a talented and driven MBCC Group team. At the same time, Sika has taken a tremendous leap forward on its path to joining forces with MBCC Group. Together we will strengthen our growth platform further.”
INEOS Enterprises CEO, Ashley Reed, said : “I am very pleased to have agreed the acquisition of MBCC Group’s Admixture business, these well invested and well positioned sites, present new opportunities for INEOS to grow in the construction market. We have a strong track record of manufacturing excellence, running businesses safely and reliably and working closely with customers to meet their growth aspirations. I very much look forward to welcoming the business into INEOS.”
The completion of the transaction as well as Sika’s acquisition of MBCC Group are subject to regulatory approvals and expected in first half of 2023.
Sika expects annual synergies of up to $277.7 million following closing. The company has already received unconditional regulatory approval for the acquisition of MBCC Group in countries such as Japan, China, Brazil, South Africa, Saudi Arabia, Turkey, Thailand and Mexico.
The Australian Competition & Consumer Commission (ACCC), however, has preliminary concerns that the transaction would substantially lessen competition in Australia in the supply of chemical admixtures by combining the two largest suppliers resulting in a likely market share of approximately 80 per cent.
To address the ACCC’s concerns, Sika is offering a court-enforceable undertaking to divest MBCC Group’s entire business including its subsidiary, Bluey Technologies, in Australia and New Zealand.
This is part of a global remedy being proposed by the parties which would also commit Sika to divest MBCC Group’s admixture business in the European Economic Area, Switzerland, United Kingdom, United States and Canada including several research and development facilities.
The MBCC Group businesses would be sold to a single purchaser approved by the ACCC and relevant international competition agencies. The ACCC has liaised closely with other competition agencies in relation to the merger review and remedy proposal.
“In assessing the divestiture undertaking, we must be satisfied it will effectively address our competition concerns in Australia,” said ACCC Commissioner, Stephen Ridgeway.
“We are seeking views from market participants as to whether the proposed divestiture undertaking would create an effective, independent and long-term competitor to Sika.
“The release of an undertaking for public consultation is consistent with our usual practice and should not be interpreted as an indication that the ACCC will ultimately accept the undertaking and not oppose the transaction.”
In other news, mining company, Rio Tinto, continues to prioritise safety and has reported several operational records.
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