Solvay, the family-controlled international chemical group, has announced it has finalised the sale of its pharmaceutical business to Abbot for €5.2 billion. On the back of antitrust clearances, the Belgium-based company also said it planned to buy back up to 5.1 million of the company's own shares.
The conclusion of the sale, first announced back in September (click here to read our coverage of the story), engenders a first cash payment to Abbot of €4.5 billion and additional potential cash payments of up to €300 million if specific milestones are met between 2011 and 2013. It also includes the assumption of certain liabilities and sale price adjustments, which Solvay valued at approximately €360 million on 1 January 2010.
Solvay said it will refocus its activities by reinvesting the proceeds of the sale in "high value-added activities and strategic projects in chemicals and plastics". Specifically, it will continue its geographical expansion into regions with growth potential and continue to develop new products with low energy footprint that will reduce the cyclicality in its portfolio of activities.
In the meantime, the company announced it is launching what it calls a "treasury share investment program" by buying back up to 5.1 million shares of near 17 million in existence at a price between €20 and €150.
The company has stated the buy back is temporary and has mandated a credit institution to execute this investment programme for a period of one year.
Solvay is in its sixth-generation of family ownership and has over 2,500 family shareholders, who between them own 30% of the multinational business. Founded in 1863 by Ernest Solvay, the company still works in the chemical industry in which it first began. Fifth-generation Denis and Jean-Marie (pictured) Solvay both work in senior management of the group, Denis as vice-chairman and Jean-Marie as a company director.
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