France-based diversified chemical manufacturer Arkema has closed its previously announced acquisition of Ashland’s Performance Adhesives business for around $1.65bn in an all-cash transaction.

The company signed an agreement to acquire Ashland’s business in August last year.

Ashland’s Performance Adhesives business supplies a wide range of adhesives for flexible packaging and pressure-sensitive adhesives for various markets, including decorative labels, protection and signage films for automotives and buildings.

The business operates a network of six production plants, most of which are located in North America, and has around 330 employees.

Last year, the business generated an estimated $360m in sales and an earnings before interest, tax, depreciation and amortisation (EBITDA) margin above 25%.

The deal is in line with Arkema’s strategy to deal exclusively in speciality materials by 2024.

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It is also intended to help the company’s adhesive and sealing business, Bostik, to expand its range of product offerings and strengthen its position in the high-performance industrial adhesives market.

Arkema said that following the acquisition, Bostik can aim for an EBITDA margin above 17% by 2024.

Arkema chairman and CEO Thierry Le Henaff said: “We are very happy to welcome Ashland Performance Adhesives’ teams within Arkema.

“I am convinced that Bostik will benefit from this deal to accelerate its development in attractive and high-growth applications.

“Our strengthened Adhesive Solutions segment will play a key role in implementing our ambition to be a leader in innovative materials for a more sustainable world.”

Ashland expects to receive net proceeds of around $1.2bn to $1.3bn from the divestiture.

The company will invest this capital to support its core businesses and enhance its balance sheet and reward shareholders.

Ashland chair and CEO Guillermo Novo said: “The sale of our Performance Adhesives business completes our journey as a focused additive and speciality ingredients company with leadership positions in life sciences, personal care and coatings.”