Belgium's Solvay pays $5.5bn for US composite materials firm

Belgian chemicals giant Solvay said Wednesday it will pay $5.5 billion for US firm Cytec, aiming to be a key player in the fast-moving air and space composite materials market.

"The proposed acquisition of Cytec marks a major step change in Solvay’s portfolio upgrade," chief executive officer Jean-Pierre Clamadieu said in a statement.

"It is a decisive step and it will not be the last," he added in a later conference call.

Cytec is based in the US state of New Jersey and has 4,600 employees globally. Sales run at around $2.0 billion annually.

The statement described Cytec as "among the world leaders in composite materials and in mining chemicals."

"In the fast-growing composite materials sector, which represents two-thirds of its sales, its principal market is primary and secondary structures for aircraft," it said.

"It is also developing new technological applications for composites in automotive," it added.

Solvay said it would fund the deal by raising fresh capital of 1.5 billion euros, alongside a bond issue of 1.0 billion euros and other financing.

The Belgian company separately announced second-quarter results showing a strong return to profitability, with net earnings of 143 million  euros compared with a loss of 292 million euros a year earlier.

Sales for the three months to June rose 4.2 percent to 2.67 billion euros.

Solvay shares were down 0.66 percent in early trade on the Belgian stock market after a gain of some 3.0 percent on Tuesday.