Sika draws sponsor interest in sale of MBCC assets

Ryan Gould , Kezia Joseph , Joao Grando and Bhavna Kaul
19 October 2022

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Cinven Partners, CVC Capital Partners, Carlyle and Bain Capital are among suitors exploring offers for a package of assets being sold by construction chemicals maker Sika, according to sources familiar with the matter.

The buyout groups are working towards a 30 October deadline for the submission of initial bids following the distribution of information memoranda to prospective buyers last week, the sources said.

With the sale, Switzerland-based Sika is aiming to address regulatory concerns over its CHF 5.5bn (USD 5.6bn) acquisition of German peer MBCC Group. The UK's Competition and Markets Authority (CMA) in August announced an in-depth review amid concerns the deal could weaken competition in the supply of chemical admixtures.

The asset package, which includes MBCC's admixtures businesses in North America, Europe, Australia and New Zealand, generates total revenues of roughly USD 900m, around half of which comes from the US, one of the sources said.

Parts of Sika's admixtures business were said to have drawn interest from strategic players including Holcim and HeidelbergCement earlier this year while it was still being shopped in piecemeal form.

Agreed in 2021, Sika's acquisition of MBCC – formerly known as BASF Construction Chemicals – is its biggest deal to date. The company said in a statement that the CMA's Phase 2 examination means the closure of the acquisition is now targeted for 1H23, noting the adapted timeline "will not impact the strategic attractiveness of the transaction".

The acquisition has already received unconditional approval from regulators in Japan, China, Brazil, South Africa, Saudi Arabia, Turkey and Thailand.

Representatives for Cinven declined to comment. Sika, CVC, Carlyle and Bain did not respond to requests for comment.