The Ineos Composites Business Sale: The Strategy and Insights Behind the 13.2 Billion Yuan Deal

According to foreign media reports, INEOS has completed the sale of its composite materials business, with the transaction counterpart beingKPS Capital Partners, LP ("KPS"), with a transaction amount of approximately 1.7 billion euros.

IneosChairmanAshley ReedonceIndicates:"We are delighted to have completed this transaction with KPS, which will build on the strong foundations laid by INEOS over the past five years. We believe that under KPS's leadership, the business will continue to grow and succeed in the coming years."

Part 1 Boots on the Ground! A Review of the Ingenious Incident

Ingersoll Randis a global leading manufacturer of unsaturated polyester resins, vinyl ester resins, and gel coats. Its products are used to produce plastic composites, which are widely applied in global large-scale end markets such as building materials, entertainment, transportation, and wind energy. The company operates in North America, South America, Europe, Asia, and the Middle East.17 manufacturing plants and 3 technology centers。

companyIn China's layout, it is understood that Ineos has a production base in the Changzhou National Hi-Tech Zone in Jiangsu Province, which was established in.December 19, 2003.IneosIn Changzhou, there is also an expansion project for vinyl ester resin, which was launched onThe groundbreaking ceremony was held on July 23, 2023, and is expected to be completed by the end of 2025.

Moreover,INEOSBASF and Sinopec jointly built a world-class facility in Ningbo.ABS factory, with a maximum capacity of 600,000 tons per year.

Let’s get back to the sale event.in2018年, INEOS acquired the entire composites business and its European BDO business from Ashland for $1 billion, further consolidating its position in the composites sector. Seven years later, INEOS began restructuring its composites business.

December 2, 2024It has been reported that INEOS has reached an agreement with private equity firm KPS Capital Partners (hereinafter referred to as KPS) to sell its composites business to KPS.

January 2025：IneosStart withKPS Capital Partners initiated contact and negotiations to explore the possibility of selling the composite materials business.

February 2025:The two parties reached a preliminary consensus on the terms of the transaction,IneosDecide to sell its composite materials business toKPS Capital Partners。

March 2025:The transaction details were further finalized, and both parties officially signed the agreement, with the transaction consideration being approximately 1.7 billion euros (equivalent to about 13 billion yuan).

April 1, 2025:It is rumored that,IneosAnnounced the completion of the sale of its composite materials business toTransactions by KPS Capital Partners.

At the same time, there has been a change in management.Andrew Miller will continue to serve as the CEO of the composites business, ensuring a smooth transition and sustained growth.

IneosSelling its composite materials business toKPS Capital Partners，From initial contact with negotiations to officially signing the agreement and completing the transactionallReflects the strategic considerations and market dynamics of both parties. This transaction not only providesINEOSIt has brought considerable financial returns and also provided new opportunities and resource support for the future development of its composite materials business.

Part2Behind INEOS's business adjustments

IneosThe composite materials business focuses on the production of key materials such as unsaturated polyester resins, vinyl ester resins, and gel coats. Its products are widely used in the production of plastic composites across major global end markets, including construction, transportation, recreation, and renewable energy.

This business unit helps clients significantly optimize the performance of their products, including enhancing corrosion resistance, flame retardancy, UV resistance, water and chemical resistance, thermal insulation and electrical insulation properties, impact resistance and scratch resistance, as well as achieving a high strength-to-weight ratio.

INEOS Composites plays a significant role in the production of plastic composites for large end-markets globally, with its products boasting a range of excellent properties. However, despite notable safety and financial progress over the past five years, intensifying market competition, particularly from low-cost countries, along with global economic uncertainties, has prompted INEOS to reconsider the allocation and direction of resource investment.

It is worth mentioning that the sale of the composites business is not due to losses in the business; the composites business has annual sales exceeding800 million euros, rather it is due to Ineos' consideration of strategic adjustments and resource optimization.

Unlike the common inter-company mergers and acquisitions in the chemical industry, the acquirer in this case...KPS is a private equity investment company. The participation of private equity funds has brought new models and ideas to mergers and acquisitions in the chemical industry. INEOS Composites has an extensive market presence and customer base worldwide. With KPS taking over, it will leverage its professional capabilities in the investment field to further enhance the market competitiveness of this business. After the acquisition, KPS may carry out a series of strategic integrations and optimizations on the composites business to achieve higher operational efficiency and market value. This differs from internal corporate integration and may bring new management concepts and operational models.

Part3：Private equity funds still play an important role in chemical industry M&A.

KPS manages approximately $19.7 billion in assets (as of December 31, 2024). The company has an outstanding track record in acquisitions and investments in the manufacturing and industrial sectors, covering multiple industries including basic materials, branded consumer goods, healthcare and luxury goods, automotive parts, capital equipment, and general manufacturing.

Acquisition of Siemens' subsidiary business:

On May 16, 2024, KPS Capital Partners announced that it had signed a definitive agreement through its newly established affiliate to acquire Innomotics, the motor and large drive business, from Siemens. The transaction amount is 3.5 billion euros (approximately 27.4 billion yuan), and the deal is expected to be completed in the fourth quarter of 2024 or the first quarter of 2025.

Innometics was founded in 2023 as a new company resulting from Siemens' spin-off of its motor and large drive business. The company has approximately 15,000 employees and annual revenues of 3.3 billion euros. This acquisition is a significant move by KPS in the industrial sector, further consolidating its influence in manufacturing and industry.

AcquisitionTaylorMade Golf：
KPS Capital Partners acquired TaylorMade Golf, a well-known golf equipment manufacturer. TaylorMade Golf is renowned for its innovative golf equipment and high-performance products. KPS's acquisition helped the company optimize its operational structure, enhance its market competitiveness, and further expand its market share.

AcquisitionWaterford Wedgwood：
KPS Capital Partners acquired Waterford Wedgwood, a renowned high-end tableware and glassware manufacturer. Waterford Wedgwood is globally celebrated for its exquisite designs and superior quality products. KPS's acquisition helped the company optimize production processes, enhance product quality, and further expand its market share.

In recent years, the chemical industryand its downstream industriesM&A activities are relatively sluggish due to global economic conditions and geopolitical influences. However, private equity funds continue to play a significant role in the chemical industry’s M&A landscape, with their participation being more flexible.

Conclusion

The sale of INEOS's composite materials business is not just a single event, but also a significant exploration of how enterprises can respond to market changes in the current economic environment. Faced with a rapidly evolving market, companies must possess flexibility and foresight, seeking the best resource allocation strategies.

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