Elkem ASA initiates exclusive sale of its Silicones division
Elkem ASA has formally announced the commencement of an exclusive sales process for its Silicones division, signalling a strategic shift toward core business optimisation and capital allocation. The decision follows a comprehensive review launched in January, during which Elkem assessed the relative value of its Silicones unit against its broader portfolio, which includes ferrosilicon alloys, carbon materials, and microsilica products.
Strategic rationale
Elkem’s management has positioned the sale as a means to:
- Streamline the group structure – By divesting a non‑core but profitable segment, Elkem aims to sharpen its focus on high‑growth areas such as Silicon Products and Carbon Solutions.
- Unlock capital – Proceeds from the transaction would be redirected to accelerate growth initiatives, research and development, and potentially to reduce leverage within the group.
- Enhance shareholder value – The transaction is viewed as the most efficient way to capture market valuation for the Silicones division, which has experienced robust demand in construction, refractory, and oilfield applications.
Transaction framework
The company is negotiating exclusively with a major industry participant possessing a significant global footprint in the chemical sector. While the identity of the buyer remains confidential, the partnership is expected to bring synergies in supply chain, technology, and market reach. Elkem has engaged ABG Sundal Collier as its financial adviser to oversee valuation, negotiation, and regulatory compliance.
The expected timeline for a definitive agreement is the first half of 2026, contingent upon successful negotiations and requisite regulatory approvals. Elkem’s board has communicated confidence that the process will be conducted with due diligence to safeguard stakeholder interests and maintain operational continuity during the transition.
Market implications
Elkem’s share price, trading at NOK 24.54 as of 16 September 2025, reflects a price‑earnings ratio of 43.09, indicative of premium expectations for the company’s remaining business units. The 52‑week range (NOK 16.5 to 26.5) underscores volatility that may tighten as the transaction progresses. Investors will monitor the deal’s progress closely, as successful divestiture could unlock liquidity and potentially elevate the company’s valuation multiple.
Forward‑looking perspective
With a market capitalization of approximately NOK 15.7 billion, Elkem is positioned to leverage the sale of its Silicones division to reinforce its core competencies in silicon‑based materials. The strategic realignment aligns with global trends favouring high‑performance materials in energy, infrastructure, and advanced manufacturing. By reallocating resources to Silicon Products and Carbon Solutions, Elkem is poised to capture emerging opportunities in sustainable construction and carbon capture technologies.
The forthcoming negotiations will be a decisive moment for Elkem’s long‑term trajectory. A successful outcome could reposition the company as a leaner, more focused player with heightened capacity to innovate and expand in its core markets.