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ZURICH, Dec 19 (Reuters) - Clariant is selling its masterbatches unit to U.S.-based PolyOne Corp for $1.6 billion, the Swiss specialty chemicals maker said on Thursday, adding it will pay shareholders about $1 billion from the proceeds.
Clariant is selling the business that includes colours, additives and special effect concentrates for plastics to the U.S. polymers maker after the failure of a joint venture to combine the unit with parts of Saudi Basic Industries, Clariant's largest shareholder.
After scrapping the JV, Clariant is focusing on chemicals for consumer products likes soaps and shampoos, the oil and gas industry, and catalysts that help speed up chemical reactions, while selling portions of its portfolio for which it anticipates more modest growth prospects.
"This announcement is a significant milestone on our path to focusing on businesses with above-market growth, higher profitability and stronger cash generation," Chairman Hariolf Kottmann said in a statement. "We are confident that we will execute the remaining divestment of our Pigments business in 2020 in order to build the new, more focused and stronger Clariant by 2021."
With the special distribution of 3 Swiss francs per share, Clariant will return about $1 billion to shareholders who have sent the stock 27% lower over the past two years amid turbulence set off in 2017 when the Swiss company's bid to merge with U.S.-based Huntsman Corp was torpedoed by activist investors.
Masterbatches had sales last year of 1.2 billion Swiss francs ($1.2 billion), about a sixth of Clariant's total $6.6 billion in turnover.
Clariant's disposal comes as the company is still looking for a new chief executive. Former CEO Ernesto Occhiello quit in July just before the joint venture with Saudi Basic Industries collapsed. ($1 = 0.9972 Swiss francs) (Reporting by John Miller; Editing by Michelle Martin and Michael Shields)