Solvay today announces that it has on 15 February 2010 closed the sale to Abbott of the pharmaceuticals business of the Solvay Group for a total Enterprise Value of about EUR 5.2 billion. This includes a first cash payment at closing of EUR 4.5 billion and additional potential cash payments of up to EUR 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 EUR 360 million on January 1st, 2010.
All antitrust clearances have been obtained, the most recent one being the clearance from the EU authority, obtained on February, 11, 2010.
The transaction provides for the transfer at closing of all employees of the pharmaceutical business. The transaction also includes the customary provisions limiting future exposure of Solvay to its former pharmaceutical activities.
The after taxes capital gain on the transaction is estimated at EUR 1.7 billion on January 1st, 2010. It will be booked in the Group results of the 1st quarter 2010 in the “discontinued operations”. The computation of the capital gain is available on the next page. This capital gain is subject to limited adjustment for the variations in net asset value of the activities from January 1st, 2010 to 15 February 2010.
Furthermore, as previously announced, provisions to adapt the organization of the Group will have to be created. These amounts are not determined at this stage and will be part of subsequent communication.
It should also be noted that the operational results of the Pharmaceutical Sector from 1st January 2010 until 15 February 2010 will be detailed in the “discontinued operations” in the Group results of the 1st quarter 2010.
Solvay will refocus its activities in order to accelerate the implementation of its sustainable and profitable growth strategy. It intends to reinvest the proceeds of the sale in high value-added activities and strategic projects in chemicals and plastics, by continuing the geographical expansion into regions with growth potential and by continuing the development of activities and new products with low energy footprint and which reduce the cyclicality in Solvay’s portfolio of activities. Studies about such reinvestments are ongoing.
The proceeds of the sale will temporarily be invested in short duration government (Germany, France, The Netherlands, Belgium) and highest rated treasury instruments and in treasury shares of maximum 5.1 million shares (6% of the issued capital of Solvay). The details of this treasury share investment program are described
in a separate announcement published today.
SOLVAY is an international industrial Group active in Chemistry. It offers a broad range of products and solutions that contribute to improving quality of life. The Group is headquartered in Brussels and employs about 19,000 people in 50 countries. In 2009, its consolidated sales amounted to EUR 8.5 billion. Solvay is listed on the NYSE Euronext stock exchange in Brussels (NYSE Euronext: SOLB.BE - Bloomberg: SOLB.BB - Reuters: SOLBt.BR). Details are available at www.solvay.com.
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