With around 330 employees and six production plants, Ashland's performance adhesives business provides a range of adhesives for flexible packaging applications

Ashland

Arkema has agreed to acquire Ashland’s performance adhesives business. (Credit: Arkema)

French speciality chemicals and advanced materials company Arkema has agreed to acquire performance adhesives business from Ashland, a wholly-owned subsidiary of Ashland Global Holdings, in an all-cash transaction valued at around $1.65bn.

Ashland, which is expecting net proceeds between $1.2bn and $1.3bn from the sale, will use the amount to invest in the growth of core businesses, enhance its balance sheet and reward shareholders.

Ashland chairman and CEO Guillermo Novo said: “I want to thank the leadership team and global employees for their dedication and commitment to Ashland and to our customers. I believe that Arkema will be a great owner of the business, creating value for customers and employees.”

With estimated sales of up to $360m and an estimated EBITDA of around $95m, Ashland’s performance adhesives business offers a portfolio of adhesive solutions for a variety of applications and markets.

With around 330 employees and six production plants, Ashland’s performance adhesives business provides a range of adhesives for flexible packaging applications.

The significant presence of Ashland’s business in North America will allow Arkema’s company Bostik to complete its geographic presence in flexible lamination and become one of the key players in this segment.

The business also offers pressure-sensitive adhesives, which are used in decorative, protection, and signage films for automotive and buildings.

It also offers structural adhesives that can be used in segments such as wood bonding for construction, composites and transportation.

The acquired business will also enable to upgrade the 2024 profitability target of Arkema’s Adhesive Solutions segment, which intends to achieve an EBITDA margin of more than 17% with sales of over €3bn.

Arkema Group chairman and CEO Thierry Le Hénaff said: “In a context of strong earnings growth following the recent divestment of PMMA and the start of the strategic review of Fluorogases, the acquisition of Ashland’s adhesives business is a fantastic opportunity to reinforce the Group’s presence in the US and to accelerate Bostik’s growth.”

Subject to receipt of regulatory approvals and satisfaction of other customary closing conditions, the deal is expected to be completed by the end of this calendar year.

Citi is serving as financial advisor to Ashland, while Cravath, Swaine & Moor and Squire Patton Bogg are serving as legal advisors to Ashland.