Kemira has signed an agreement to divest its Oil & Gas-related portfolio to Sterling Specialty Chemicals LLC, a US subsidiary of Artek Group, a global industrial chemicals group based in India. The transaction enables Kemira to focus on its core businesses and accelerate its profitable growth strategy. Kemira and Sterling Specialty Chemicals LLC will also enter into a long-term partnership, consisting of contract manufacturing agreements in both directions.

“The divestment of the Oil & Gas business will clarify our focus on sustainability and our strategic priorities: we want to expand in water, build a leading renewables portfolio and digital services business. This move strengthens our capability to look for growth within our water treatment and Pulp & Paper businesses and also to explore new growth opportunities. With Sterling Specialty Chemicals LLC, we have found a committed owner for the Oil & Gas business enabling it to grow further. Our long-term partnership with Sterling Specialty Chemicals LLC will support the transition for our customers,” says Petri Castrén, Interim President and CEO at Kemira.

“The acquisition of a high-quality Oil & Gas-related portfolio from Kemira is another step in our global vision and growth strategy of becoming a leading specialty chemicals player. We warmly welcome all new employees and are looking forward to exploring exciting future growth opportunities together with our existing oil & gas business. We are also pleased with our long-term partnership with Kemira, one of our largest customers going forward,” says Vishal Goenka, Director at Artek Group.

The revenue to be carved-out from Kemira was around € 430 million in 2022. This includes Kemira’s Oil & Gas business, which had a revenue of EUR 373 million in 2022. The remaining carved-out revenue of around € 57 million consisted of non-Oil & Gas industrial polymer sales through indirect channels.

Approximately 250 employees are expected transfer to the buyer as part of the transaction, which includes Kemira’s manufacturing facilities in Mobile, Columbus and Aberdeen in the United States. The Teesport manufacturing facility in the United Kingdom is included in the transaction subject to certain site-specific closing conditions being fulfilled.

In addition, the novel liquid polymer (NLP) manufacturing assets, which are part of Kemira’s manufacturing facility in Botlek, the Netherlands, are included in the transaction, but Kemira will continue to operate the plant under a long-term agreement and will retain the employees.

The total consideration on a cash and debt-free basis amounts to approximately US$ 280 million, around € 260 million with today’s exchange rate, subject to ordinary closing adjustments. Based on current estimates, assets amounting to around EUR 300 million are expected to transfer to the buyer as part of the transaction. The Oil & Gas -related portfolio will be classified as held for sale until closing.

Kemira and Sterling Specialty Chemicals target to complete the transaction by the end of Q1 2024 at the latest. The completion of the transaction is subject to customary closing conditions and regulatory approvals before completion. The transaction will be carried out as a combination of a share and assets sale.