Tessenderlo sells PVC and Chlor-Alkali businesses to INEOS

The Valence Group has successfully advised Tessenderlo Group (NYSE Euronext: TESB) on its sale of the PVC and Chlor-Alkali activities to INEOS subsidiary Kerling.

Kerling, through its INEOS ChlorVinyls business, will purchase Tessenderlo Groups PVC activities, including VCM, Chlor-Alkali and part of Organic Chlorine Derivatives. Besides the major plant at Tessenderlo in Belgium, the production plants in France (Mazingarbe) and the Netherlands (Beek and Maastricht) are involved. These businesses employ about 850 people. This transaction is subject to European merger control approval.

The purchase price is 110 million Euros on a cash-free, debt-free basis.

Frank Coenen, CEO of Tessenderlo Group, emphasised that INEOSChlorVinyls will be an excellent owner of these activities: In light of our announced strategy – focusing on specialities – we looked for a long time for the right home for these businesses. Our well-invested assets together with our highly competent workforce are both strengths that were recognized by INEOSChlorVinyls. As a European leader, INEOSChlorVinyls is well placed to offer these businesses the best possible growth opportunities.

Peter Hall, Partner at The Valence Group, commented: We have worked very closely with Tessenderlo to help them find and execute an exit from a challenging business in a sector where exit opportunities are limited. The fact that we not only found a solution, but that the business to be divested is transferring to such a good owner with an outstanding management team and a clear commitment to the PVC sector, reflects our unique position as the worlds leading specialist investment bank to the chemicals, materials and related sectors. We are pleased to have been able to deliver to a key client the benefits of our unique combination of skill sets and experience in chemicals M&A “ financial, strategic and industrial. Divestitures such as these, in challenging sub-sectors, require specialist advice grounded on years of collective experience and insight.

Ariel Levin, Partner at The Valence Group, said: We are very excited to be continuing our advisory work with the Tessenderlo team and represent them on this second disposal so far in 2011. This move will likely prove to be the pivotal step in Tessenderlos strategic transformation into a specialty chemical company. Intra-European consolidation within the PVC sector has had many false starts and we believe this could be a turning point in that process. The PVC sector is a challenging one and the commercial, strategic and transactional issues are very specific to the sector “ we are delighted to have once again brought our sector expertise to bear on this transaction.