Royal DSM, a  Netherlands-based multinational corporation, has decided to sell its Resins & Functional Materials and associated business for an equity value of €1.6 billion (~$ 1.87 billion). The deal for the sale has been signed with German adhesive manufacturer Covestro AG.

The company said that the transaction would include its all Resins & Functional Material businesses, including DSM Niaga®, DSM Additive Manufacturing, and the coating activities of DSM Advanced Solar. However, DSM Advanced Solar’s activities in next-generation backsheets for photovoltaic modules remain a part of the company.

According to the company, DSM Resins and Functional Materials business comprises the sustainable coatings division and functional materials division, which supply products like resins for consumption in paints, other industrial applications, and optical fiber coatings. DSM advanced solar coatings are utilized in solar glasses.

According to its press statement, the transaction is expected to be completed in the first half of 2021. Upon closing of the transaction, the company is expected to receive around €1.4 billion (~$ 1.64 billion) in cash, including repayments of Resins & Functional Materials’ net debt, capital gains tax, and after transaction costs.

“This sale builds on our approach of actively managing our businesses, as DSM continues to evolve as a purpose-lead science-based company operating in the field of nutrition, health, and sustainable living. The deal delivers strong value to DSM and strategically attractive for all parties,” said Geraldine Matchett and Dimitri de Vreeze, Co-Chief Executive Officers of Royal DSM.

These businesses represented €1.012 billion (~$ 1. 18 billion) of the company’s total net sales in 2019, as well as its total earnings before Interest, Taxes, Depreciation, and Amortization (EBITDA) worth €133 million (~$ 156.21 million) in 2019. The company would provide the rehashed figures of its materials cluster before its results for the third quarter.

The company stated that the collaboration of Covestro AG and DSM’s resins & functional materials unit would develop the business with advanced scale and technological capabilities, benefitting its consumers and employees.

According to Mercom Capital Group’s Solar Funding and M&A Report, in the first half of 2020, there were a total of 25 solar M&A transactions of which six of them disclosed transaction amount totaling $184 million.