Chemical manufacturer BASF has recently inked an agreement to divest its Neopolen expanded polypropylene (EPP) business to Knauf Industries GmbH, a European specialist in EPP molded components.

In a press release, BASF officials highlighted that Neopolen plays a pivotal role in the creation of lightweight molded parts serving the automotive industry and various heating and air conditioning applications. This strategic decision aligns with BASF's ongoing efforts to refine its business portfolio and focus on core areas of expertise.

The transaction encompasses a range of assets, most notably a production facility located at BASF's site in Schwarzheide, Germany. Alongside the physical infrastructure, Knauf Industries will acquire the associated products, intellectual property, customer and supplier contracts, as well as trademark rights. Approximately 40 employees at the Schwarzheide site will be impacted by this transition. The consummation of the deal is contingent upon the receipt of requisite approvals from pertinent merger control authorities, and it is slated to conclude by March 31, 2024.

Mia Pettersson, the head of the global specialty polymers business unit at BASF, expressed confidence in the choice of Knauf Industries as the new custodian of the Neopolen business.

The Neopolen expanded polypropylene business, a critical part of BASF's operations, plays a pivotal role in various industries, particularly the automotive sector. Its lightweight and versatile nature make it an ideal material for crafting molded components, contributing to the overall efficiency and performance of automobiles. Additionally, the material has found applications in heating and air conditioning systems, where its insulating properties and durability are highly valued.

Knauf Industries GmbH, the acquiring party in this transaction, is a prominent player in the European market for EPP molded components. This strategic move by Knauf Industries aligns with its growth ambitions and its goal of expanding its presence and capabilities in the foam industry.

The inclusion of the production plant in Schwarzheide, Germany, as part of the deal underscores the significance of the location as a hub for manufacturing Neopolen products. The transfer of intellectual property, customer and supplier contracts, and trademark rights ensures a seamless transition of the Neopolen business to Knauf Industries, providing continuity for existing relationships and commitments.

The impact of this transaction on employees at the Schwarzheide site is a key consideration for both BASF and Knauf Industries. Employee welfare and ensuring a smooth transition will likely be a priority as the deal progresses towards its expected closure in March 2024.

The timeline for the completion of the transaction, subject to regulatory approvals, provides a clear roadmap for the transfer of assets and responsibilities from BASF to Knauf Industries. Both companies are expected to work closely to ensure that the handover is executed with precision and in a manner that safeguards the integrity of the Neopolen business.