Celanese Takes ExxonMobil Elastomers Business

01.07.2021 - Celanese has emerged as the buyer of the TPV elastomers business Exxon Mobil put on the sale block earlier this year. The US chemicals and engineering plastics group said on Jun. 30 it had signed a definitive agreement to acquire the portfolio that includes the iconic Santoprene brand along with intellectual property, production and commercial assets.

The Reuters news agency first reported in April that the Houston, Texas-based energy and petrochemicals group was exploring a sale of its Advanced Elastomer Systems division, potentially valuing the business at around $800 million including debt.

Under the terms of the agreement now sealed, Celanese will pay $1.15 billion on a cash-free, debt-free basis to take over the products trademarked as Santoprene, Dytron and Geolast, with all customer and supplier contracts and agreements and comprehensive TPV intellectual property, along with associated technical and R&D assets.

As part of the arrangement, the Dallas, Texas-based chemicals player will also gain two “world-scale” production facilities for the chemically cross-linked, high-performance materials in Pensacola, Florida, USA, and at Newport, Wales, with more than 190,000 t/y of total annual production capacity. It will also add about 350 employees.

Celanese said it expects the transaction, which it plans to finance through excess cash and available balance sheet liquidity, to be immediately accretive to 2022 adjusted earnings per share and free cash flow. Subject to regulatory approvals, carve-out preparations and other customary conditions, closing is expected for this year’s fourth quarter.

“With the acquisition of the Santoprene business, we are further expanding the unrivaled portfolio of engineered solutions we bring to our customers,” said Celanese CEO Lori Ryerkerk. She described the deal as a “high-return opportunity to drive future shareholder value by deploying the excess cash from the monetization of our passive ownership in Polyplastics and continued strong cash generation in our businesses.”

The US group ended its long-term association with Japanese chemical producer Daicel in October last year, selling its remaining interest in Polyplastics to its former joint venture partner for nearly $1.6 billion.

The deal with ExxonMobil “substantially strengthens our existing elastomers portfolio, allowing us to bring a wider range of functionalized solutions into targeted growth areas including future mobility, medical, and sustainability,” said Tom Kelly, Celanese’s senior vice president Engineered Materials.

Author: Dede Williams, Freelance Journalist