Producer of chemicals and plastics, Solvay, has entered into an agreement to acquire Cytec – the world’s second largest player in aerospace composite materials, for US$5.5 billion (£3.5 billion).
The move, says Solvay, will accelerate the growth of its advanced materials business, with a major push into the composites market, particularly the booming aerospace sector.
"The proposed acquisition of Cytec marks a major step change in Solvay's portfolio upgrade. It is a unique opportunity for Solvay to boost its customer offerings in lightweighting with advanced materials in aerospace and automotive, as well as to strengthen its know-how with activities in mining chemicals," said Jean-Pierre Clamadieu, CEO of Solvay.
“This transaction will lead us to further accelerate our transformation,” he added.
Headquartered in New Jersey with 4,600 employees across the globe, Cytec generated sales of US$ 2.0 billion and a 20 percent REBITDA* margin in 2014. It sources almost half of its sales from North America, nearly a third from EMEA and the remainder from Asia Pacific and Latin America.
Cytec is among the world leaders in composite materials and in mining chemicals. In the fast-growing composite materials sector, which represents two thirds of its sales, its principal market is primary and secondary structures for aircrafts. It is also developing new technological applications for composites in automotive.
Through the acquisition of Cytec, Solvay says it will gain “critical scale and immediate customer intimacy in aerospace”. In the automotive market, Solvay says strong positions with original equipment manufacturers and tier-one suppliers will help bolster Cytec's growth.