Arkema to Strengthen its Position in Specialty Chemicals with Proposed Acquisition of Bostik

An acquisition project fully aligned with Arkema’s strategy

In accordance with the strategy implemented since its stock market listing, this operation would allow Arkema to further strengthen its position in specialty chemicals and to continue developing its High Performance Materials segment, which would account for 42% of total sales following the acquisition of Bostik.

"Since 2006 Arkema has carried through a successful in-depth transformation of its business portfolio with the aim of becoming a world leader in specialty chemicals. The proposed acquisition of Bostik represents a new major milestone towards this ambition. The complementarities between the two companies, the quality of Bostik’s management and teams, the common roots within the Total group, and the brands and technologies are all factors that will sustain value creation for our shareholders and ensure successful execution of the project. For Arkema, this new exciting challenge complements the ambitious plan currently in progress to establish acrylics and thiochemicals in Asia through the Jurong and Kerteh projects, restore the profitability of fluorogases, carry through its ?00 million savings plan announced recently, and realize the strong growth prospects in the attractive oil and gas segment " Thierry Le Hénaff, Arkema Chairman and CEO, stated.

In a steadily growing adhesives market, Bostik’s current pace of development together with the synergies identified between the two groups will help improve Bostik’s EBITDA margin, with the long-term objective to achieve an EBITDA margin of 14% to 15%, in line with peers average.

This strong potential for improving the results, the solid cash flow generation and the low capital-intensity of Bostik will enable Arkema to continue strengthening its profile and its resilience to the changes of the economic environment.

With the proposed acquisition of Bostik, Arkema would achieve proforma sales of some ?.6 billion while increasing its headcount to some 19,000 people.

This project would also entail increasing the divestment program of non-core activities representing some ?00 million additional sales.

Taking into account the proposed acquisition of Bostik and the contemplated divestment program, the Group raises its 2017 EBITDA target to ?.310 billion.

A financing structure designed to protect the Group’s balance sheet and credit rating In order to maintain a sound balance sheet structure and preserve its financial flexibility, this project would be financed by a ?50 million rights issue, the issuance of hybrid securities of between ?00 and ?00 million, and a senior bond issuance for the balance, i.e. between ?00 and ?00 million. The share capital increase would be made through preferential subscription rights for existing shareholders. These