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07-30-2015

Solvay to Acquire Cytec

Solvay has entered into a definitive merger agreement with U.S.-based Cytec to acquire 100% of its share capital for USD 75.25 per share in cash. The total cash consideration will amount to US$5.5 billion, corresponding to an enterprise value of USD 6.4 billion. Cytec's and Solvay's boards of directors have unanimously recommended the transaction.

Headquartered in New Jersey with 4,600 employees across the globe, Cytec generated sales of US$ 2.0 billion and a 20% 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, recognized by its customers as a consistently successful innovator and provider of high-performance and value-added solutions. 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. Cytec is the leader in tailored specialty chemical formulations to enhance mining separation processes.

Through the acquisition of Cytec, Solvay will gain critical scale and immediate customer intimacy in aerospace. In the automotive market, Solvay's strong positions with original equipment manufacturers and tier-one suppliers will help bolster Cytec's growth. Moreover, Cytec will significantly reinforce Solvay's sustainability profile as its offerings are addressing planet's challenges. With Cytec, Solvay will stand out stronger in reducing CO2 emissions through its lightweighting solutions and in dealing with the increasing scarcity of resources through more efficient and cleaner mining technologies.

Cytec's composites businesses will be integrated into Solvay's Advanced Materials operating segment. Its mining chemicals as well as its niche additives and phosphine specialty chemical businesses will become part of Solvay's Advanced Formulations segment. This transaction will underpin Solvay's REBITDA growth momentum, by driving top line growth and margin expansion. Solvay expects annual synergies of more than EUR 100 million, to be substantially realized within three years chiefly through cost savings and excellence. Significant cross-selling opportunities have been identified with Specialty Polymers, both in aerospace and automotive, as well as with Novecare in oil & gas, agrochemicals and electronics.

This acquisition is structured as a cash merger between Cytec and a subsidiary of Solvay. The merger is subject to customary closing conditions, including regulatory approvals and Cytec shareholders' approval. The transaction is expected to close in the fourth quarter of 2015.

Company profile

SOLVAY SA

Rue de Ransbeek 310
BE 1120 BRUSSELS

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