Syensqo FIRST LOOK: Divesting Oil & Gas BU to SNF for an EV of € 135m

The announced divestment of the Oil & Gas business unit to SNF was no surprise, as this business had been earmarked previously as non-core and did not fit well with the ESG profile and profitability margins of the remainder of the group. The transaction is fairly small though, with an EV of € 135m. Despite the weak current earnings momentum at Syensqo, we believe that cost efficiency measures and further portfolio streamlining (also Aroma Performance is considered non core) should eventually be positive for the investment case. We continue to believe valuation is attractive and we reiterate our BUY rating and € 90 target price.