HELSINKI Feb 14 Finnish chemicals group Kemira said it is selling its stake in German titanium dioxide joint venture Sachtleben for 97.5 million euros ($131 million), a price analysts said was unexpectedly low.
Kemira said it was selling its 39 percent stake to joint venture partner Rockwood Holdings to focus on its other businesses, such as water quality management and chemical solutions for the oil and mining industries.
Both Kemira and Rockwood had been looking to dispose of Sachtleben after a downturn in the market for titanium dioxide, which reflects light and is used in paints and car coatings, sources familiar with the matter said.
Despite the proposed deal to buy Kemira's stake, Rockwood may yet sell the entire operation.
"Given our prior statements that the titanium dioxide business is non-core, it is our key objective this year to explore and execute on the best strategic option for Rockwood," Chief Executive Seifi Ghasemi said in a statement.
Pohjola Markets analyst Antti Saari said that Kemira was selling its Sachtleben stake for a surprisingly low price, adding that it raised questions over why it was so eager for an exit.
"The price tag should have been at least at 150 million euros," Saari said. "It could be they are preparing a bigger deal where that money is needed. That could be an acquisition for their oil and mining division."
Shares in Kemira, which said it would book a one-off writedown of about 25 million euros for the first quarter of 2013, were down 2.1 percent at 11.42 euros by 1246 GMT.