Elkem ASA has announced an agreement to sell the majority of its Silicones division to Bluestar. The agreement sells the majority of the Silicones division assets to Bluestar in a transaction where the full consideration payable by Bluestar will be settled through the redemption of all of Bluestar’s shares in Elkem. After completion of the transaction, Bluestar will no longer hold any Elkem shares.

Elkem made announcements to the stock exchanges on January 23, 2025, and September 18, 2025, regarding the strategic review of its Silicones division and the initiation of an exclusive sales process. According to Elkem, after a comprehensive assessment of all available options, the company believes that entering into the share purchase agreement delivers the most favorable outcome for both the Silicones division and the company.

As Elkem’s largest shareholder and former owner of parts of the Silicones assets, Bluestar has extensive knowledge of Elkem’s Silicones division and is strategically focused on developing its position in the silicones value chain.

“This transaction is the result of a thorough strategic review initiated in early 2025 and reflects the Board’s clear ambition to create the strongest possible foundation for long-term value creation. We are confident that the agreement with Bluestar delivers a favorable outcome for Elkem’s employees, shareholders and other stakeholders, while positioning both Elkem’s metals and materials divisions, and the Silicones division for future growth,” says Elkem deputy chair of the Board of Directors Dag J Opedal.

The transaction is conditional upon the approval by Elkem’s general meeting and waivers and approvals from Elkem’s lenders, and other customary approvals and conditions. Explaining the company’s reason for the deal, Elkem CEO Helge Aasen explains, “Since its founding more than 120 years ago, Elkem has consistently optimized its portfolio to adapt to changing market dynamics and capitalize on emerging growth opportunities. By divesting the majority of the Silicones division, we are simplifying our business, sharpening our strategic focus and allocating capital where we see strong long-term growth opportunities. We are confident that the agreement also delivers the most favorable outcome for the Silicones division positioning the business for accelerated specialization and growth.”

The Silicones entities being retained by Elkem and excluded from the transaction are Yongdeng (Silicon Metal China), Roussillon (upstream Silicones in France) and Chakan (downstream Silicones in India). For Roussillon, Elkem has entered into a five-year supply agreement of upstream silicones to the downstream business to be acquired by Bluestar, which will take effect upon the closing of the transaction, as well as to a renowned third party, ensuring economically viable operations that are expected to be earnings neutral. For the other Retained Silicones Assets, strategic alternatives are being explored.

The deal represents a significant milestone in streamlining Elkem into a focused, pure play metals and materials company. Elkem reports that completion of the transaction will enable the company to reallocate capital to these segments over time, accelerating growth and ensuring a more attractive financial profile with reduced complexity, less volatility, and stronger cash flow generation for investment and distribution to shareholders. Moreover, Elkem will be better suited to pursue value-accretive expansion opportunities.

Bluestar representatives on Elkem’s Board of Directors and their representative on the nomination committee will resign their positions effective immediately following closing of the deal, and new members to the board of directors will be elected.

“Following the transaction, Elkem will be a focused metals and materials producer. This allows us to pursue tailored strategies aligned with our divisions’ unique strengths and respective market dynamics. We will remain an international industrial major with production plants across five continents, underscoring our position as a leading producer with an integrated value chain. We will continue to prioritize innovation through our R&D centers worldwide, to meet the demands stemming from heightened focus on supply chain security for critical materials. Our robust financial profile will position us well to pursue selective growth and consolidation opportunities within our core segments,” concludes Aasen.