SK Global Chemical has signed a contract to acquire the functional polyolefin business of Arkema, a France-based global manufacturer of specialty chemicals and advanced materials.
The company hopes that the acquisition will catapult it into the global high-value added packaging materials market.
The company’s acquisition plan was approved by its board on Oct. 14. Its offer is subject to an information and consultation process involving Arkema’s employee representative bodies and to the approval of the relevant antitrust authorities. The acquisition, worth 335 million euros, is expected to be finalized by the second quarter of next year.
SK Global Chemical previously purchased ethylene acrylic acid (EAA) and polyvinylidene chloride (PVDC) from Dow in 2017 to expand into the North American region.
The proposed acquisition of Arkema’s functional polyolefin business will provide the Korean company with a production and sales network, technology and marketing talent, and a large European client base. In other words, it will offer a total solution in all aspects of the packaging industry.
This will give SK Global Chemical a competitive edge in the American and European markets, while at the same time allowing it to maximize synergy between previously acquired and new businesses.
It will also enable SK Global Chemical to provide a multi-layered packaging solution tailored to each customer, based on a stronger materials portfolio. It will also allow the company to expand its customer base in the packaging industry with more effective marketing campaigns and additional supply opportunities.
Furthermore, the company can enhance operational efficiency and save logistics costs by integrating its global logistics system to encompass product storage and transportation.
SK Global Chemical has focused on acquiring companies to expand its materials portfolio, prioritizing the high-value packaging business on its list of next generation growth items.
A case in point is its acquisition of EAA and PVDC, which are mainly used as tie and barrier layer, from Dow Chemical in 2017.
The acquisition will provide SK Global Chemical with Arkema’s three France-based production facilities, technology and marketing talent for four products including ethylene acrylate copolymer, ethylene acrylate terpolymer, ethylene vinyl acetate copolymer, maleic anhydride grafted polymer.
These four products are mainly used as adhesive in multi-layer packaging, and Arkema is one of the the world’s most competitive players in the packaging market.
SK Global Chemical CEO Na Kyung-soo said, “Our packaging portfolio has been upgraded to the level of Dow, a major global market player, with the acquisition of Arkema’s functional polyolefin business.” He added, “The improved competitiveness will help SK Global Chemical to expand not only in the European and American markets, but also in the Asian market, including China. Utilizing SK Global Chemical’s infrastructure and network in China, we will grow into a top global player in the high-value packaging industry.”