Cepsa Explores $ 3.4 Billion Sale of Its Chemicals Branch to Help Fund Clean Energy Transition, Auto News, ET Auto
Spanish oil company Cepsa plans to sell its chemicals business in a bid to raise funds to speed up its transition from fossil fuels to clean energy, two sources with knowledge of the matter told Reuters.
Cepsa is working with Citi to identify possible bidders for the unit which is valued at up to 3 billion euros ($ 3.47 billion), the sources said, warning that talks are at a preliminary stage and that ‘no agreement is certain.
The Madrid-based company, which is owned by Abu Dhabi state fund Mubadala and private equity firm Carlyle, hired former Shell executive Maarten Wetselaar in January as the new chief executive with a mandate to ” accelerate the implementation of the company’s energy transition strategy and offer âmore differentiated and sustainable energy solutionsâ to its customers.
If successful, the sale would unlock funds to finance Cepsa’s push into renewables, with part of the proceeds going back to shareholders, one of the sources said. Cepsa and Citi were not immediately available for comment.
Cepsa said on Thursday that its chemicals business generated a basic profit of 355 million euros in the nine months to September, a 39% increase from last year. The unit manufactures chemical components for the IT, cosmetics and automotive industries among others and has production plants in Canada, Brazil, Germany and China.
Cepsa is expected to probe the interest of both private equity funds and European chemicals companies, including Germany’s Evonik and Switzerland’s Ineos, the sources said. Bain Capital and Cinven closed the biggest chemicals deals of 2021 with the $ 4.7 billion purchase of Lonza’s specialty ingredients business in February.
Mega-deals in chemicals totaled around $ 115 billion in 2019, according to a PwC study, but saw a slowdown last year due to the COVID-19 pandemic. âThe recovery of the global economy after COVID-19 will lead to increased merger and acquisition activity in chemicals for the remainder of 2021,â said Craig Kocak, a business partner at PwC in the United States.