Clariant AG CLN.S :
* MAKES A STEP CHANGE INTO HIGHER VALUE SPECIALTIES
* CREATION OF A NEW AND STRONGER CLARIANT WITH SALES OF APPROXIMATELY CHF 9 BILLION AND AN EBITDA MARGIN OF AROUND 20 % IN 2021E
* INTENDED TRANSACTION TO COMBINE CLARIANT'S ADDITIVES AND HIGH VALUE MASTERBATCHES WITH PARTS OF SABIC'S SPECIALTIES BUSINESS
* COMBINATION TO RESULT IN SIGNIFICANT SYNERGIES WITH AN ANTICIPATED ANNUAL RUN-RATE OF CHF 100 MILLION, REALIZED OVER THREE YEARS FROM CLOSING
* IMPLEMENTATION COSTS ARE ESTIMATED AT CHF 80 MILLION OVER SAME TIME
* COMBINATION WILL BE SIGNIFICANTLY EPS ACCRETIVE IN FIRST YEAR
* CLARIANT WILL HAVE MAJORITY STAKE IN INTENDED BUSINESS COMBINATION
* CLARIANT - DEPENDING ON DEFINITIVE VALUATION WHICH IS TO BE DETERMINED BY BOTH PARTIES IN COMING MONTHS, AN EQUALIZATION CONSIDERATION WILL BE MADE BY CLARIANT TO SABIC
* THIS SHOULD NOT LEAD TO CLARIANT'S PRO FORMA 2019E NET DEBT/EBITDA LEVERAGE RATIO EXCEEDING 2.4 X, SHOULD LEAVE CURRENT INVESTMENT GRADE RATING UNAFFECTED
* CLARIANT AND SABIC TARGET TO SIGN DEFINITIVE AGREEMENT BY END OF FIRST HALF OF 2019
* IN ADDITION, CLARIANT ANNOUNCED THAT BY 2020 IT INTENDS TO DIVEST PIGMENTS, STANDARD MASTERBATCHES AND MEDICAL SPECIALTIES BUSINESSES
* DIVESTMENT DECISION UNDERLINES CLARIANT'S COMMITMENT TO MOVE PORTFOLIO INTO HIGHER SPECIALTY AREAS AND TO ENSURE BEST OWNERSHIP FOR EACH OF ITS BUSINESSES
* CLARIANT ALSO ANNOUNCED NEW TARGETS FOR 2021 IN EACH BUSINESS AREA
* INCREASE IN EARNINGS QUALITY, OPERATING CASH FLOW ENABLES ATTRACTIVE DIVIDEND POLICY, I.E. TO INCREASE OR AT LEAST MAINTAIN ABSOLUTE DIVIDEND AMOUNT IN SWISS FRANCS EVERY YEAR
Source text for Eikon: ID:nGNE1X7Y8R Further company coverage: CLN.S
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