British billionaire Jim Ratcliffe’s Ineos to buy Sika assets

INEOS, the chemicals company built by British billionaire Jim Ratcliffe, has agreed to buy assets that are being sold by Sika to appease antitrust regulators.

A subsidiary of Ratcliffe’s firm will acquire construction company MBCC’s admixtures business in the US, Canada and Europe, and its entire business in Australia and New Zealand, Sika said on Monday (Jan 16). 

The assets generated net sales of about 920 million Swiss francs (S$1.3 billion) by the end of 2022, the statement showed, though details of the price consideration were not disclosed. The deal values the assets at about US$750 million, sources said.

Sika is selling the assets as it seeks to gain regulatory approval for its largest transaction on record, the 5.5-billion-franc takeover of German rival MBCC. The Swiss company’s admixture business makes substances that can be added to concrete to modify its properties. 

The disposal and the MBCC transaction are subject to regulatory approval, and are slated to be completed in the first half of 2023, the release showed. Sika said that it expects annual synergies of around 160 million to 180 million Swiss francs after the deal’s completion. 

Shares of Sika have increased 11 per cent in Zurich trading this year, giving the company a market value of 37.9 billion francs. 

Ineos beat out private-equity firms including Cinven, CVC Capital Partners and Clayton, Dubilier & Rice, Bloomberg News reported.

Sika in September relaunched the sale of the admixtures business in North America, Europe and Australia, after an attempt to sell it piecemeal received antitrust pushback. The UK’s merger watchdog had launched an in-depth investigation into the MBCC deal, over concerns that it might weaken national competition in the supply of chemical admixtures.

The assets that Ineos will acquire include production sites and sales offices in 36 countries with over 1,600 employees, the release showed. 

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Sika, which makes sealants, mortars and other building adhesives, has been stepping up its pace of dealmaking. Its chief executive officer, Thomas Hasler, is seeking to tap into demand for new materials that support both sustainability and the shift to electric vehicles.

Ratcliffe has been expanding his business empire beyond the chemicals industry, including launching an off-road vehicle to compete with Land Rover’s Defender. Ineos has invested in cycling, sailing and motorsport teams over the past decade, though attempts to break into English Premier League football have been less successful. BLOOMBERG