DuPont Sells Mobility & Materials to Celanese

21.02.2022 - DuPont has agreed to sell most of its Mobility & Materials (M&M) segment to Celanese for $11 billion on a cash and debt-free basis. The deal – DuPont’s biggest since splitting from DowDuPont – is expected to close around the end of this year, subject to regulatory approvals and customary conditions.

The sale includes the engineering polymers business and select lines within the performance resins and advanced solutions businesses, comprising nylons, specialty nylons, polyesters and elastomers. Combined, the businesses generated net sales of roughly $3.5 billion and operating EBITDA of about $800 million last year.

Excluded from the sale are DuPont’s automotive adhesives, Multibase thermoplastic additives and Tedlar surface protection films.

The transaction, said DuPont executive chairman and CEO Ed Breen, will “create a market-leading portfolio serving the automotive, consumer and industrial markets with unmatched scale, manufacturing capability and technical expertise.”

He added that the announcement “represents a significant milestone in DuPont's transformation as a premier multi-industrial company building upon our recent acquisition of Laird Performance Materials and our intended acquisition of Rogers Corporation to further define DuPont as a market leader in the areas of electronics, water, industrial technologies, protection and next generation automotive.”

Analysts seem to like the long-term benefits for Celanese. Evercore ISI’s senior managing director Stephen Richardson said the acquisition “has the potential to be truly transformative, bolstering scale, improving vertical integration and providing opportunities to scale into complementary growth areas.”

Michael Sison, managing director at Wells Fargo, described the deal as “a win-win” and “a transformative positive” for Celanese’s engineering materials business, doubling its size and scope.

Celanese will gain a global production network of 29 facilities, including compounding and polymerization plants, an intellectual property portfolio that includes about 850 patents with associated technical and R&D assets, and approximately 5,000 staff.

Commenting on the move, Lori Ryerkerk, Celanese’s chair and CEO said: “The acquisition of the M&M business is an important strategic step forward and establishes Celanese as the preeminent global specialty materials company. Our businesses are highly complementary, which will accelerate our growth in high-value applications including future mobility, connectivity and medical.”

Within the first four years after the transaction closes, Celanese expects to achieve run-rate synergies of about $450 million.

DuPont aims to use net proceeds from the sale to fund its previously announced acquisition of Rogers Corp, as well as further M&A opportunities and additional share repurchases. Last November, DuPont agreed to pay $5.2 billion for Rogers, a global leader in engineered materials and components, such as high-frequency circuit materials, ceramic substrates for power semiconductor devices and high-performance foams for a variety of highly specialized end-markets. The transaction is expected to close in the second quarter of 2022.

Separately, DuPont said it continues to advance the process to divest its Delrin acetal homopolymer business and hopes to close a sale in the first quarter of 2023. According to Breen, there is substantial interest in the business.

Author: Elaine Burridge, Freelance Journalist