GE sells it silicones business to US investment firm
sold its GE Advanced Materials business, which includes its
activities in the silicones area, to Apollo management company for
$3.8bn.
Silicones are widely used in the cosmetics industry for just about every aspect of production, from formulation through to packaging, with GE Advanced Materials has played an increasingly important part as a worldwide supplier to the industry in recent years.
GE says that upon completion of the transaction it will received a 10 per cent ownership stake in the business, which is also active in the Quartz field.
The closing transaction is expected to be undertaken before the end of the year, but is subject to regulatory approval.
"Advanced Materials is a global leader in a wide range of high-technology materials solutions," said Joshua Harris, a founding partner of Apollo. "It has a world class management team, a robust technology portfolio and strong research and development. This combination makes it an extremely valuable asset and gives Apollo a solid foundation to profitably grow this business and create long-term value."
GE Advanced Materials has an annual turnover of $2.5 billion and is focused on the supply of silicone-based products, including silanes, sealants, urethane additives and adhesives; as well as high-purity fused quartz and ceramics materials. It is headquartered in Wilton, Conneticut and employs 5,000 people in 38 locations worldwide.
Silicones are mainly used to add texture to liquid cosmetic formulations, providing anything from silkier lotions to smoother-spreading sunscreens and drier anti-perspirants.
As well as sensory qualities, silicones are used for emolliency, to reduce friction and tensionm, as well as providing oxidative stability in finished products ranging from hair care to every type of lotion and cream.
Recent market reports from the Freedonia Group indicate that there is significant potential for further growth in both the market for silicones during the course of the next three years, which could see it top a value $3.8bn.
The study also suggests that the material's positive market image and strong performance advantage will be the key factors that will continue to drive the category, with silicone gels and foams expected to be key growth areas.
