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Evonik plans 1Q23 launch of C4 sale, Deutsche Bank mandated – sources

Evonik may retain a stake in C4, one of the sources said. The subsidiary has EUR 350m expected EBITDA in 2022 and expects significant growth in 2023, this source added.

In 2021, C4 revenues amounted to EUR 1.8bn, with EUR 300m in EBITDA, the source said. 

Evonik is likely to target other petrochemical businesses as buyers for C4, potentially in a JV-type structure similar to the tie up between Lanxess [ETR: LXS] and Saudi Aramco [TADAWUL: 2222], a sector banker tracking the situation said. 

Earlier this year at its capital markets day, Evonik announced plans to align its portfolio and exit three of its businesses; Performance Materials – Superabsorbents, Functional Solutions and the Performance Intermediates (C4) unit. Evonik stated it would look to find new owners or partners for these units in the course of 2023, the proceeds of which will be funnelled into green transformation. 

Superabsorbents is expected to be the next unit to come to market after C4, two of the sources said. In comparison with C4, Superabsorbents is a low-margin business with a limited product portfolio, the largest production area being nappies for a limited market, the sector banker said. That unit will instead attract mid-cap PEs and firms specialising in turnaround cases, the banker said. 

The C4 unit produces chemicals for use as propellants in hairspray, plasticisers for PVC, components in latex mattresses, anti-knock agents in petrol or as raw materials for the tyre industry. 

Evonik has been carrying out a range of asset disposals lately: On September 6, it sold RheinPerChemie to Calibre Chemicals, an India-based specialty chemicals company, backed by Everstone Capital. On August 1, it sold its amphoteric surfactants and specialty esters manufacturing operations in Hopewell, Virignia, to Kensing, a US-based manufacturer of natural vitamin E, plant sterols, specialty esters and high-purity anionic surfactants, and a portfolio company of One Rock Capital Partners.

Evonik and Deutsche Bank declined to comment.