Clariant will have the majority stake in the intended business combination. Depending on the definitive valuation which is to be determined by both parties in the coming months, an equalization consideration will be made by Clariant to Sabic. This, however, should not lead to Clariant's pro forma 2019E net debt (including pensions) / EBITDA leverage ratio exceeding 2.4 x (including Sabic's Specialties business but based on Clariant's current portfolio set-up before disposals) and should leave the current investment grade rating unaffected. In the coming months, Clariant and Sabic will execute the carve-out of their respective businesses, conduct reciprocal due diligence and continue negotiating the transaction with the target to sign the definitive agreement by the end of the first half of 2019. Completion of the transaction is expected to take place towards the end of 2019, effective as of 1 January 2020, subject to regulatory clearances.
Divestment of the remaining Plastics & Coatings businesses
In addition, Clariant announced that by 2020 it intends to divest the Pigments, standard Masterbatches and Medical Specialties businesses which will not be included in the newly formed Business Area High Performance Materials. This divestment decision underlines Clariant's commitment to move the portfolio into higher specialty areas and to ensure best ownership for each of its businesses. Despite being well positioned and having significantly increased their profitability over the past years, the businesses to be divested do not match the Group's criteria to differentiate through innovation in higher growth and higher profitability areas.Clariant's Strategic Direction
Following a strategic review Clariant also announced new targets for 2021 in each Business Area. Profitable growth will be driven by sustainable innovations and specialized customer solutions which meet the demand for convenience, safety, sustainability and energy efficiency. With the strategic update and the resulting higher earnings quality, Clariant also changes its EBITDA margin target from previously "before exceptional items" to "after exceptional items" going forward. As a consequence, Clariant’s financial reporting will be changed accordingly beginning in 2019.The Business Area Care Chemicals expects to continue to grow above the market, at a more accelerated pace. This additional step up in growth will result from offering more innovative sustainable solutions which meet the market's increasing demand for convenience, renewable and natural products. The entry into new market segments will also support this above average growth. Consumer Care, which is comprised of Personal Care, Home Care, Crop Solutions as well as Health Care, will be the main driver of this Business Area's expansion strategy. The higher degree of specialties in Care Chemicals and the offering of more highly specified solutions will drive not only growth but also increase profitability to new heights.
