Elkem's Strategic Move: Selling Majority of Silicones Division to Bluestar to Focus on Core Metals and Materials

Elkem's Strategic Shift: Selling Silicones Division to Bluestar

In a significant business development, Elkem, a prominent player in silicon-based materials, has announced its decision to sell the majority of its Silicones division to Bluestar. This strategic move aims to hone Elkem's focus on its core business of metals and materials, paving the way for future growth and specialization. The transaction is anticipated to complete by May 2026, subject to shareholder approval and regulatory compliance.

Details of the Transaction

The agreement outlines that the transaction will not involve any cash payments. Instead, it will be settled through the redemption of Bluestar's shares in Elkem - specifically, 338,338,536 shares, which account for 52.9% of Elkem's total shares outstanding. This transaction will not only streamline Elkem’s portfolio but also allow both companies to realign operational strategies tailored to their strengths in the market.

Elkem has expressed confidence that this divestment aligns with its long-term strategic goals. Dag J Opedal, Elkem's Deputy Chair of the Board, stated that the agreement with Bluestar provides an opportunity for Elkem to create a robust foundation for sustained value creation in its metals and materials divisions. This strategic decision stems from a comprehensive evaluation initiated in early 2025, emphasizing the need for a simplified operational focus and geared towards future growth in key markets.

The Importance of Bluestar in Elkem’s Future

As Elkem’s largest shareholder with a historical connection to parts of the Silicones assets, Bluestar brings extensive knowledge of this division. Their strategic intentions center on enhancing their position within the silicones value chain. The majority of the Silicones division assets, encapsulated in this agreement, are distributed globally, with a significant market presence in the Asia-Pacific region, further underscoring the strategic importance of this transaction.

Long-Term Implications for Elkem

Post-transaction, Elkem plans to concentrate on its remaining segments: Silicon Products and Carbon Solutions. The company anticipates improved cash flow generation due to reduced complexity in its operations. With a clearer strategic focus, Elkem aims to maintain a strong financial profile, allowing for optimized capital allocation, and attracting investment opportunities that align with the company's core competencies.

Helge Aasen, Elkem's CEO, emphasizes the importance of innovation and strategic positioning within the evolving market landscape. Following the sale, Elkem will still operate significant production facilities across five continents, solidifying its role as a leader in delivering critical materials that support the green and digital transitions globally.

Shareholder and Regulatory Approvals

The completion of the transaction is contingent upon several key approvals. Elkem's Board of Directors has called for an extraordinary general meeting (EGM) scheduled for March 9, 2026, where shareholders will vote on the share purchase agreement and the associated share redemption. Notably, certain institutional shareholders have already committed support for the transaction, representing approximately 30% of the shares eligible to vote. This backing will be crucial for obtaining the necessary approvals to finalize the deal.

Subsequent to the EGM and upon securing the requisite approvals, the transaction is expected to close by late April or early May 2026. As Elkem embarks on this strategic shift, the leadership remains committed to maintaining transparency with all stakeholders, ensuring ongoing dialogue with its lenders concerning necessary financial restructuring following the deal.

Conclusion

The sale of Elkem’s Silicones division to Bluestar marks a pivotal point in the company's journey to strengthen its identity as a dedicated metals and materials producer. By divesting a segment that no longer aligns with its core operational focus, Elkem positions itself to pursue tailored strategies that leverage its strengths in growth markets. As the company looks to the future, its commitment to innovation, sustainability, and customer relations will be paramount in navigating the demands of a rapidly evolving industry landscape.