Rhodia Sells Its North American Specialty Phosphates Business to Bain Capital for 550 Million Dollars

PARIS, Jun 11, 2004 -- Rhodia (NYSE : RHA) today announced the signing of a definitive agreement with Bain Capital for the sale of Rhodia's North American specialty phosphates business for an enterprise value of 550 million dollars (approximately 460 million euros at today's exchange rates), representing an EBITDA multiple greater than seven. The agreement is expected to be finalized in the third quarter of 2004.

The business is a leading, diversified producer of phosphoric acid and phosphates for use in a wide variety of industrial applications, including food, pharmaceuticals, water and metal treatment, horticulture, textiles and detergents. It had total net sales of 400 million euros in 2003 and employs 1,075 people.

The business will be managed by the existing senior management team and will be renamed upon completion of the transaction. As part of the sale agreement, Rhodia will continue to market phosphates with applications in pharmaceuticals.

"With the divestments already announced by the Group since the beginning of the year, this transaction will enable us to achieve around 880 million euros from divestitures in 2004 at an average multiple of 10 times EBITDA," said Rhodia CEO, Jean-Pierre Clamadieu. "These divestments also represent an important step in refocusing the Group on a more limited portfolio of strategic businesses. We can now concentrate our resources on managing our businesses and improving their performance."

After closing adjustments, divestiture fees and tax impact, the total net proceeds from divestitures in 2004 will be substantially over the 700 million euro objective announced by the Group in October 2003.

Rhodia is a global specialty chemicals company recognized for its strong technology positions in applications chemistry, specialty materials & services and fine chemicals. Partnering with major players in the automotive, electronics, fibers, pharmaceuticals, agrochemicals, consumer care, tires and paints & coatings markets, Rhodia offers tailor-made solutions combining original molecules and technologies to respond to customers' needs. Rhodia subscribes to the principles of Sustainable Development communicating its commitments and performance openly with stakeholders. Rhodia generated net sales of 5.4 billion euros in 2003 and employs 23,000 people worldwide. Rhodia is listed on the Paris and New York stock exchanges.

Bain Capital (www.baincapital.com) is a global private investment firm that manages several pools of capital including private equity, high-yield assets, mezzanine capital and public equity with more than $17 billion in assets under management. The firm has strong experience in a variety of industries and with "carve-out" transactions in which non-core businesses or assets of corporations are purchased by private investors. Since its inception in 1984, the firm has made private equity investments and add-on acquisitions in over 225 companies around the world. A global team of investment professionals dedicated to industrial businesses have guided investments in a broadly diversified group of companies including NOVACAP, a leading manufacturer and distributor of chemicals acquired from Rhodia in January, 2003. Additional industrial investments include SigmaKalon, Brenntag, Treofan, and Sud-Dekor / Dakor. Headquartered in Boston, Bain Capital has offices in New York, London and Munich.

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