Dive Brief:
- PPG reached an agreement with chemical maker Qemetica to sell its silica products business for approximately $310 million, according to an Aug. 29 press release.
- The pending deal includes manufacturing plants in Lake Charles, Louisiana, and Delfzijl, the Netherlands, according to the release. The silica products business is led by 400 people.
- Qemetica will also lease to PPG the two facilities as well as research and development sites in Barberton, Ohio, and Monroeville, Pennsylvania, according to Qemetica’s press release. The deal is expected to close in Q4.
Dive Insight:
PPG’s silica business makes and supplies precipitated silica products to major companies globally as performance-enhancing additives, according to the website.
Silica is shapeless silicon dioxide used in food and feed to prevent moisture and keep them fresh. It’s also used in food packaging, battery separators, tires, paints, coatings and footwear to make them more resilient in harsh environments.
“As a result of this acquisition, Qemetica will be able to offer more specialized chemicals (precipitated silica) used by blue chip customers to manufacture end products such as modern ‘green’ tires,” the company said in its news release.
PPG’s divestiture of its silica product business came after the manufacturer said in Q1 it will review alternatives for the portfolio as well as its U.S. and Canada architectural coatings business. The silicas business unit represented between 1 to 2% of PPG’s total net sales in 2023, according to the release.
The evaluation helped PPG determine whether the two businesses would grow faster with a partner or different owner, or operated as a core business with another company, according to the Q1 securities filing.
After the coatings maker completed its silica business review, the company believes Qemetica will lead that particular business forward, PPG Chairman and CEO Tim Knavish said in the release.
“This transaction will allow us to further focus our resources on our technology-differentiated coatings and specialty products businesses to accelerate our organic growth and drive increased shareholder value creation,” Knavish said in a statement.
As for its U.S. and Canada architectural coatings business, PPG is making progress and has a number of interested parties, Knavish said in a Q2 earnings call in July.
Qemetica’s acquisition of PPG’s silica products business will enable the Poland-based chemical company to enter the U.S. market, bringing it closer to its 2024-2029 growth strategy goals, CEO Kamil Majczak said in the Aug. 29 press release.
“We were looking for a business in which we could add value, invest and grow, based in the U.S., with a 100% or controlling stake, extending our value chain,” Majczak said in a statement.
Qemetica has manufacturing facilities in Poland, Germany, Spain and Romania, according to the website. The company also produces soda ash, evaporated salt, agricultural solutions, polyurethane foams, glass and silicates.
