Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Imerys SA, the French provider of specialty materials, is planning a sale of its high temperature solutions business, people familiar with the matter said.
The Paris-based company is working with advisers at Morgan Stanley and Rothschild & Co. to gauge interest in the unit, according to the people, who asked not to be identified because the information is private. It could fetch as much as 900 million euros ($1 billion), the people said.
The high temperature solutions division provides minerals to make insulation materials for molds and furnaces used by metal foundries and iron and steel producers, as well as to protect industrial equipment used in power plants, chemical refineries and cement factories.
The business, which accounts for about one-sixth of Imerys’s sales, competes with firms including Vesuvius Plc and Austria’s RHI Magnesita NV. Its revenue rose 18% in the first half of 2021 to 385 million euros.
A divestment would give Imerys more capital to invest in its performance minerals segment, which produces ingredients and additives for products such as paints, adhesives, solar panels and batteries. Deliberations are ongoing, and there’s no certainty they will lead to a transaction, the people said.
Representatives for Imerys and Morgan Stanley declined to comment, while a spokesperson for Rothschild couldn’t immediately comment.
Shares of Imerys, which now has a market capitalization of about 3.3 billion euros, have lost more than half their value over the last four years. The company’s stock has been hammered as its North American talc operations have been part of a Chapter 11 bankruptcy process amid numerous asbestos injury lawsuits related to allegedly tainted Johnson & Johnson baby powder.
(By Aaron Kirchfeld, Dinesh Nair and Francois de Beaupuy)
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