According to French newspaper Les Echos, SNPE has entered exclusive negotiations to sell its fine chemicals and contract manufacturing subsidiary Isochem to the German investment fund Aurelius. It is also said to be selling SME, its core propellants business, to Safran and its nitrocellulose operation in the US, Bergerac, to Dow Wolff Cellulosics.

The report added that a 45-day exclusivity period for the deal to be completed commenced on 17 November. Neither Isochem nor Aurelius has yet commented, nor has any purchase figure been cited.

Les Echos added that four other interested purchasers had been in the running: three French industrial concerns in the form of Axyntis, Orrion and Minakem, plus the International Chemical Investors Group (ICIG), which owns WeylChem, Miteni, PPC, Corden PharmaChem and other European fine chemicals interests.

The story, if true, would come as a surprise to many in the industry, both in terms of the successful purchaser and those rejected. It was widely agreed that the French government would prefer a French industrial purchaser but that neither Axyntis nor Minakem would want all of the spare capacity that Isochem offers. It may be that only Aurelius was willing to take on the whole of Isochem.

SNPE, a state-owned producer of space and military propellants and explosives, formally launched the sale of Isochem on 30 June, envisaging a sale process lasting six to eight months. Should this be concluded on 31 January, as envisaged, it will have taken exactly eight months.

Isochem owns four industrial sites in France, with those at Gennevilliers, Vert-le-Petit and Pithiviers mainly serving the pharmaceuticals and cosmetics markets and Pont-de-Claix supplying the agrochemicals market. Its Hungarian subsidiary Framochem produces phosgene derivatives for all of its operations, production in France having largely ceased by government order.

This was the result of the disastrous explosion on an adjoining site at Grande Paroisse near Toulouse in September 2001. Although it had nothing to do with Isochem or any other part of SNPE, Grande Paroisse did serious damage to the business. In 2008, Isochem had improved sales of about €600 million and a gross profit about €7 million. It employs just under 600 people.

Based in Munich, Aurelius says that it focuses on “investments in companies in special situations” at below their book value and turning them around. These include company spin-offs from large corporation and medium-sized enterprises with unresolved succession, liquidity and/or operational problems.

Aurelius’s current portfolio includes: the Blaupunkt group, a Germany maker of car radios and hi-fi equipment, from Daimler; Westfalia Van Conversion, which was spun off from Bosch; UK-based plastics recycler Wellman International; German laboratory furniture and systems supplier LD Didactic Group; and, various others in such fields as hotels, home shopping, shirts, mail order books, IT consulting, premium alcoholic drinks, consumer credit and transport services. However, it has no previous investments in the chemicals industry.