Chemical major BASF and Solenis, global producer of specialty chemicals for water-intensive industries, have decided to combine their businesses. In order to create a customer-focussed company for the paper and water treatment industries, BASF's paper and water chemicals business is to be combined with Solenis.

BASF will hold 49 per cent share in the combined entity that will operate under the Solenis name. The transfer includes production sites in Ankleshwar, Gujarat, as well as those in the UK and the US.

Financial terms of the transaction were not disclosed. The combined entity will have sales of around €2.4 billion and around 5,000 employees. For the paper industry, the product portfolio of the combined enterprise will cover the entire range of functional and process wet-end chemicals, solutions for the water cycle for paper mills, as well as comprehensive service capabilities.

For the water treatment industry, the combined entity will have Solenis’ high-quality service capabilities and BASF’s broad water treatment chemicals platform.

The transaction comprises BASF’s transfer of production sites and plants of the paper wet-end and water chemicals business in Ankleshwar as well as in Bradford and Grimsby, the UK, Suffolk, Virginia, the US, Altamira, Mexico and Kwinana, Australia.

BASF’s paper and water chemicals production plants in Germany and China are not transferred, and will deliver products and raw materials to the combined entity.

BASF’s paper coating chemicals portfolio is also not part of the transaction, noted the statement.

Terming it a strategic fit for future growth, Anup Kothari, President, BASF’s Performance Chemicals division, said: “We will remain committed to paper and water treatment industries through our 49 per cent ownership of the combined entity. Combined with Solenis’ service capabilities, we will create additional value for our customers who will benefit from our joint innovation activities and product portfolios."