SOLVAY Plans To Split Into Two Independently Listed Companies To Unlock Full Value

Solvay announced today that it is reviewing plans to split the company into two independent, publicly traded companies:

EssentialCo will include leading single-technology businesses, including soda ash and derivatives, peroxides, silica and consumer chemicals, high-performance fabrics and industrial services, which are currently part of the company's chemicals segment, as well as specialty chemicals. These businesses generated net sales of about 4.1 billion euros in 2021.

SpecialtyCo will include the company's current materials segment, which includes its high-growth, high-margin specialty polymers, high-performance composites, and most of its solutions segment, which includes consumer and industrial specialty chemicals, technology solutions, flavors and functional chemicals, and oil and gas. Together, these businesses generated net sales of about €6bn in 2021.

The benefits of a split

When completed, the separation will create two strong industry leaders that will benefit from strategic and financial flexibility and focus on their respective business models, markets and shareholder preferences. After the split, the two independent companies will focus on:

▲ More focused on its strategy and growth opportunities;

▲ Pooling resources to meet their unique business needs;

▲ Adopt different business models to provide better service for customers;

Pursuing differentiated capital structure and capital tilt goal;

▲ Promoting sustainability projects, including carbon neutrality by 2040 by SpecialtyCo and 2050 by EssentialCo;

Attracting and retaining the best talents for their respective businesses;

▲ Provide a clear investment theme and vision to attract a suitable long-term investor base.

EssentialCo

Key chemicals leader with robust liquidity

EssentialCo will benefit from its strong leadership position in providing proven essential technologies to a wide range of attractive and robust end markets, including construction, consumer goods, automotive.

As an independent company, EssentialCo will leverage expansion and consolidation opportunities to further consolidate its leadership position, including accelerating growth in its natural soda ash and sodium bicarbonate businesses, capturing growth in the Asia Pacific region, and further expanding its leadership position in the integrated peroxides market. The company will also accelerate its energy transition from its soda business to play a key role in achieving carbon neutrality by 2050. Following the separation, EssentialCo will strengthen its operating model by strengthening its cost leadership and maximizing cash generation.

SpecialtyCo

A leader in specialty chemicals with accelerated growth potential

As an independent company, SpecialtyCo will provide innovative value added solutions to support a more sustainable world that will generate above-market growth and strong returns. SpecialtyCo will consist of two business units:

1

material

The Materials division is an industry leader in advanced materials, focused on providing customers with new solutions that address critical performance and environmental challenges. The Materials division has the broadest portfolio of unique, patented materials based on high-performance polymer and carbon fiber composite technologies and is a global leader in all of its core markets. The materials segment has a strong track record of outperforming market growth, backed by underlying megatrend trends such as electrification, lightweight, sustainable mobility and digitization.

The Materials division will focus on innovation, strong business capabilities and a unique understanding of its customer base, positioned to drive the continued penetration of its sustainable solutions into the market to help customers achieve disruptive growth in their industries (transportation, electronics, healthcare). The division will benefit from increased investment in capacity, innovation and commercial capabilities to support market-beating organic growth, superior returns and industry-leading margins.

2

Consumption of chemicals and resources

The Consumer Chemicals & Resources division, which consists primarily of the current solvay Solutions segment, will become a market leader focused on delivering more natural and sustainable specialty ingredients solutions by anticipating rapidly changing customer needs.

With its proven asset-light business model and underlying megatrems including environmentally friendly ingredients and resource efficiency, the division will leverage its portfolio of innovative solutions and application expertise to drive the consumer goods industry towards bio-based, natural and recycling solutions. The unit will be positioned to generate strong returns that outpace market growth.

Overview of the Trading Plan

The two companies will adopt tailored capital structures that will best support their respective value creation objectives. SpecialtyCo will aim to achieve a stable investment grade rating. It will have the financial flexibility to secure funding for growth plans. EssentialCo will inherit prudent financial policies to ensure cash flow generation. Solvay SA will seek to retain its existing investment-grade rating until it is broken up. Solvay SA is committed to providing current US dollar and euro senior notes and hybrid bondholders with the option to switch to SpecialtyCo in due course. The plan is for an initial dividend to match the level solway is offering now.

Under the split plan, Solvay shareholders will keep their current solvay shares, which will also continue to trade on the Brussels and Paris euronext exchanges. The spin-off will be achieved through a partial spin-off of Solvay, with the specialty chemicals business being spun off into SpecialtyCo. Solvay shareholders will receive SpecialtyCo shares in proportion to their stake in Solvay SA. Shares in both companies plan to trade on euronext in Brussels and Paris. The company plans to structure the split in a manner that is tax-efficient for the majority of shareholders in key jurisdictions.

The board members, management teams and names of the two companies will be announced later.

The transaction will be subject to overall market conditions and customary closing conditions, including the final approval of Solvay's board of Directors, the approval of specific financing parties and the decision of shareholders at the extraordinary General meeting. The deal is scheduled to close in the second half of 2023. The board of Solvac, solvay's long-time major shareholder, has confirmed its support for the solvay deal.

Solvay plans to report to investors on SpecialtyCo and EssentialCo's strategy before the split is completed.