Solvay signs agreement to acquire majority in Berezniki soda ash plant in Russia
Solvay announces that it has signed an agreement with sodium Group Investments Limited to acquire its majority stake in OAO Bereznikovsky Sodovy Zavod and ZAO Berkhimprom. The agreed enterprise value for the stake amounts to about 160 million EUR and the price will be subject to usual adjustments at closing. Solvay expects to finalize this acquisition early 2010 after completion of the customary steps and the relevant notifications, in particular merger control in Russia (FAS).
The Berezniki soda ash plant is one of the three major soda ash producers in Russia with a capacity of 500,000 metric tons per year. It can only produce light soda ash but dense soda ash will be available by the end of this year when the construction of a densification unit is finalized. The plant employs approximately 2,200 people and is located by the city of Berezniki in the Urals, some 200 kilometers north of Perm city.
Since early 2008, Sodium Group Investments Limited owns approximately 90% of OAO Bereznikovsky Sodovy Zavod and 100% of ZAO Berkhimprom which jointly own and operate the Berezniki soda ash activity. These both entities are currently merging. The agreement provides that after the closing in 2010 Solvay will gain immediate control on the operation of the Berezniki soda ash activity and that Sodium Group will retain a minority share over the coming 3 years. The acquisition will be paid over this period.
“With this acquisition, Solvay clearly pursues its strategy of geographical expansion in a major market,” says Vincent De Cuyper, Group General Manager of the Chemicals Sector and Member of the Executive Committee. “Solvay is very pleased with this opportunity to become a soda ash producer in Russia, at the heart of a market with exciting growth prospects,” adds Christine Tahon, Managing Director of Solvay’s Strategic Business Unit Soda Ash and Related Products.
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