Key takeaways
- A Lone Star affiliate acquired BASF's construction chemicals business for EUR 3.17 billion, cash- and debt-free, closing on 30 September 2020, and renamed it MBCC Group.
- In November 2021 Sika agreed to buy MBCC for CHF 5.5 billion (EUR 5.2 billion).
- Closing on 2 May 2023 required remedies: Sika agreed to sell MBCC's admixtures business in several markets to INEOS.
The transaction
SellerLone Star affiliate
BuyerSikaResult Sika incl. MBCC
| First sale | BASF to a Lone Star affiliate, signed 21 December 2019 |
|---|---|
| Entry price | EUR 3.17 billion, cash- and debt-free; closed 30 September 2020 |
| Business at entry | c. 7,500 employees; sales c. EUR 2.6 billion (2019) |
| Second sale | Lone Star to Sika, agreed November 2021 |
| Exit price | CHF 5.5 billion (EUR 5.2 billion) |
| MBCC sales | c. CHF 2.9 billion expected for 2021 |
| Remedy | Admixtures business in the US, Canada, EU, UK, Australia and New Zealand sold to INEOS |
| Completed | 2 May 2023 |
Timeline
- 21 Dec 2019BASF signs sale to Lone Star
- 30 Sep 2020Lone Star closes; MBCC Group is formed
- Nov 2021Sika agrees to buy MBCC for CHF 5.5bn
- Jan 2023Admixtures remedy agreed with INEOS
- 2 May 2023Sika completes the acquisition
The rationale
For BASF the 2019 sale was a portfolio decision; for Lone Star it was a carve-out to run as a stand-alone company under the new name MBCC.
For Sika, MBCC complemented and broadened its range in construction chemicals, adding scale in a fragmented market.
For Lone Star, a strategic buyer able to pay for synergies was the natural exit, and it came quickly.
The assessment
Return
The headline value rose from EUR 3.17 billion to EUR 5.2 billion, about 64%, between BASF's sale in 2019 and Sika's agreement in 2021. The equity return depends on the debt Lone Star used, which was not disclosed.
Remedy cost
Selling the admixtures business in key markets removed part of what Sika originally agreed to buy. The divestment proceeds and the effect on synergies are the details to check in Sika's reporting.
Timing
About 18 months from signing to closing shows how antitrust review can stretch a timetable and tie up capital on both sides.
What to watch
Margins of the combined business and the integration of MBCC's remaining operations.
Source: BASF, 30 September 2020; Sika via ZKG, November 2021.
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