Brussels, Belgium-based Solvay announced last week it was reviewing plans to separate the company into two independent publicly traded companies – EssentialCo and SpecialtyCo. Solvay makes perfluoropolyether lubricants and a wide variety of additives for lubricants and metalworking fluids.
Upon completion, the company said in its March 15 announcement, the separation would give each unit strategic and financial flexibility to focus on their distinctive business models, market and stakeholder priorities. It is also intended to drive sustainability initiatives, including reaching carbon neutrality before 2040 for SpecialtyCo and before 2050 for EssentialCo.
The company’s lubricants and additives for lubricants and metalworking fluids are part of its current Chemicals segment, as reported in its financial earnings, along with the company’s Special Chem, Soda Ash, Peroxides, Silica and Coatis businesses. Under the proposed split, these would all fall under the new EssentialCo company. The businesses generated €4.1 billion in net sales in 2021.
SpecialtyCo would include the company’s currently reported Materials segment – including its Specialty Polymers and Composites business, as well as the majority of its Solutions segment. The latter includes Novecare, Technology Solutions, Aroma Performance and Oil & Gas. Together, the businesses generated €6 billion in net sales in 2021.
Solvay’s products for use as lubricant additives include fatty acid esters, phosphate esters, alkyphenol ethoxylates and a variety of amines, among others. Functions include as friction modifiers, anti-wear and corrosion inhibitors.
The company’s PFPE lubricants have been used by the United States NASA and European Space Agency space programs for more than 25 years. They also are used in the automotive industry as neat oil, formulated into greases or deposited on a part using suitable carriers. In the oil and gas industry, the company’s PFPE oils are used as hydraulic fluids in extreme pressure conditions.
The transaction is subject to general market conditions and customary closing conditions, including final approval by Solvay’s Board of Directors, consent of certain financing providers and shareholder approval at an extraordinary general meeting, and is expected to be completed in the second half of 2023. The board of directors of Solvac, Solvay’s long-standing reference shareholder, has confirmed its support of Solvay’s transaction.