DuPont to sell materials unit to Celanese for US$11 bn

In a bid to restructure its portfolio, US materials firm DuPont is taking the step to sell most of its materials business to speciality chemicals firm Celanese Corp. for US$11 billion. It will divest a majority of the Mobility & Materials (M&M) segment including the Engineering Polymers business line and select product lines within the Performance Resins and Advanced Solutions business lines.

The acquired M&M product portfolio includes numerous specialty materials with global leadership positions in nylons (PA 66, PA 6), specialty nylons (HPPA, LCPA, filaments), polyesters (PET and PBT), and elastomers (TPC and EAE) but the Auto Adhesives, Multibase and Tedlar product lines within the Mobility & Materials segment (the retained M&M businesses) are not included in the scope of the intended divestitures.

Combined, the businesses generate net sales of roughly US$3.5 billion. Celanese will acquire a broad portfolio of engineered thermoplastics and elastomers, industry-renowned brands and intellectual property and global production network of 29 facilities, including compounding and polymerisation, as well as intellectual property portfolio including approximately 850 patents with associated technical and R&D assets and 5,000 employees.

Within the first four years following the close of the transaction, Celanese expects to achieve run-rate synergies of approximately US$450 million as a result of the highly complementary fit of the businesses.

The deal is expected to close around the end of 2022, subject to customary closing conditions and regulatory approvals.

DuPont CEO Ed Breen said the sale to Celanese was reached "after consideration of multiple deal structures, including a range of potential buyers." He said the company is confident the Celanese deal "maximises value for our shareholders and positions the business and our employees for long-term success."

Lori Ryerkerk, Celanese Chairman/CEO said, “Our businesses are highly complementary which will accelerate our growth in high-value applications including future mobility, connectivity and medical.”

DuPont also said it is advancing the process to divest its Delrin business, a planned sale previously mentioned in a strategic review process the company announced in November last year. The Delrin business generated net sales of over US$500 million in 2021. A deal has not been announced, however DuPont is targeting a closing date of the first quarter of 2023.

“Delrin acetal homopolymer (H-POM) is an industry leading technology utilised by customers around the world to meet their most demanding needs,” Breen said.

Meanwhile Breen spoke about the recent acquisition of Laird Performance Materials from private equity firm Advent International for US$2.3 billion in cash, a move aimed at expanding its reach into 5G telecommunications, autonomous vehicles and artificial intelligence.

He also highlighted the acquisition of specialty engineered materials maker Rogers Corp. for US$5.2 billion it announced in November, part of an ongoing transformation by DuPont to diversify its holdings. DuPont intends to use net proceeds from the divested Mobility and Materials businesses to fund the Rogers deal and explore additional merger and acquisitions opportunities. It also plans to continue share repurchases.

He added, “Our intended acquisition of Rogers Corporation will further define DuPont as a market leader in the areas of electronics, water, industrial technologies, protection and next generation automotive.”

(PRA)

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