German chemical giant BASF plans to combine its pigments operations into a global business unit early next year and establish separate legal entities for those activities later in 2016.
Company officials said the move would improve its focus on pigments customers and better adapt to changes in the industry.
A report, however, said that BASF is looking into all options for its pigments operations and that a sale could be a possibility.
Analysts told Reuters that the global pigments industry is struggling and that private equity companies could be interested in acquiring and restructuring pigment businesses.
BASF said that the unit would likely be located near its global headquarters in Ludwigshafen and that all 2,500 employees currently working in pigments would be moved under the new division.
The pigments business reported 2014 sales of $1.1 billion and serves the paint, coatings, printing, packaging and plastics industries.