BRUSSELS, June 26 (Reuters) - Belgian chemicals company Solvay said on Thursday it had completed a PVC joint venture with privately held INEOS and that it would exit the business in three years, earlier than initially planned.
Under the original terms of the deal agreed in May 2013, Solvay was to have sold its stake in the venture within four to six years.
The venture, set to be the world’s second-biggest PVC producer behind Japan’s Shin-Etsu, secured approval from the European Commission last month after the parties agreed to sell some plants and assets to ease competition concerns.
Solvay said in a statement it would now receive an upfront payment of 175 million euros ($239 million), compared with an initially envisaged 250 million euros.
The Belgian company said it would exit the venture, set to be called INOVYN, after three years and receive an additional amount based on the average core profit over those three years. Solvay said the targeted amount was 250 million euros, with a minimum payment of 75 million euros.
Solvay’s divestment fits with its plan to shift from lower-margin bulk plastics activities to speciality polymers and chemicals such as for the oil and gas sector and consumer chemicals for skin and hair care products.
Solvay said the transaction would result in an accounting impairment of 420 million euros, which would impact Solvay’s net income in the second quarter.
INOVYN will be headquartered in London and have 2013 pro forma sales of more than 3 billion euros, with 14 sites in eight countries.
$1 = 0.7335 Euros Reporting by Philip Blenkinsop; Editing by Mark Potter