The acquisition makes BlueStar the third largest silicon company in the world, after the US' Dow Corning and Germany's Wacker. The deal is expected to provide BlueStar with access to new technology and markets. The enterprise value agreed represents a multiple slightly higher then seven times recurring Ebitda.
This is the third cross-border acquisition BlueStar has announced this year. In January, the company acquired Adisseo Group for $450 million in the first cross-border outbound acquisition by a Chinese chemicals company. Adisseo Group is a French animal nutritional feeds company. Then, in April, BlueStar acquired Qenos, AustraliaÆs largest ethylene producer, for $200 million, citing the opportunity to expand in Australia as a primary driver.
BlueStar is growing its business and the geographies within which it operates to more effectively compete with the number one and two players in the industry. Meanwhile, Dow Corning and Wacker announced in early September that they would jointly invest $600 million in a new joint venture chemicals plant in Zhangjiagang in China with an annual capacity of 200,000 tonnes per annum.
In 2005, RhodiaÆs silicon business had sales of Ç417 million. The business has 1,200 employees and is mainly based in Europe with production sites in France at Saint-Fons and Roussillon.
BlueStar is a Chinese state-owned enterprise headquartered in Beijing. In 2005, it registered a sales revenue of Rmb30 billion ($3.8 billion).
The deal announcement coincides with a trip by French president Jacques Chirac to China for trade talks to bolster business between the countries. Rhodia said the transaction is part of its strategy to focus on businesses with global leadership positions and it will use proceeds to pay down debt.
BlueStar is advised by Standard Chartered and Rhodia by Credit Suisse on the transaction.
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