DSM Sheds Resins & Functional Materials Business

Nutrition, health and materials firm Royal DSM entered into an agreement to sell its Resins & Functional Materials (RFM) business to polymer producer Covestro. The proposed deal has an equity value of €1.6 billion, or about $1.8 billion, the Dutch company announced Wednesday.

“This sale builds on our approach of actively managing our businesses, as DSM continues to evolve as a purpose-led, science-based company operating in the fields of nutrition, health, and sustainable living,” the co-chief executive officers of DSM, Geraldine Matchett and Dimitri de Vreeze, said in a statement. “The deal delivers strong value to DSM and is strategically attractive for all parties.”

Covestro will acquire the DSM Resins & Functional materials business in the transaction, including DSM Additive Manufacturing, DSM Advanced Solar’s coating activities and DSM Niaga. DSM said it anticipates receiving €1.4 billion in cash once the deal closes after paying a capital gains tax, transaction costs, and RFM business’ debt.

The deal is slated to close in the first half of 2021 pending the completion of approvals and customary conditions.

DSM’s RFM business contains a Sustainable Coatings division and a Functional Materials division, as well as the VOC-free adhesive brand DSM Niaga.