M&As: Lotte Chemical sells Pakistani PTA business for US$68 mn; Sumitomo Chemical acquires Syensqo’s liquid crystal polymer neat resin business
In line with its restructuring, South Korean chemical firm Lotte Chemical has sold its entire 75% stake in affiliate in Pakistan, Lotte Chemical Pakistan (LCPL), to a consortium comprising AsiaPak Investments and Montage Oil for US$68 million. The completion of this transaction is subject to obtaining all necessary regulatory and corporate approvals, along with the fulfilment of requisite closing conditions.
The move comes after the company's profitability plunged due to the recent downturn in the petrochemical industry. The divestment in line with Lotte Chemical’s plan to sell noncore assets, strengthen high-value-added specialty materials business.
Lotte Chemical has secured 127.5 billion won by selling noncore assets and receiving unpaid shareholding gains from LCPL for the 2022–24 period, the company said.
Back in September 2009, Lotte Chemical acquired the 75% stake in the Pakistani purified terephthalic acid (PTA) company for 14.7 billion won under its expansion strategy.
Last year, its operating losses widened to 894.7 billion won from 547 billion won during the same period, while sales rose 2.4% on year to 20.4 trillion won.
Meanwhile in other news, Japan’s Sumitomo Chemical has acquired the assets of a liquid crystal polymer (LCP) neat resin business from Syensqo SA/NV, a company based in Belgium. Terms were not disclosed.
By incorporating the products and technology acquired from Syensqo through this acquisition, it adds it will strengthen its system for meeting new market needs and further expand its LCP business, particularly in ICT and mobility applications.
LCP is a type of super engineering plastic known for its excellent heat resistance, fluidity, and dimensional accuracy. It is used in various applications, including electronic components for PCs and smartphones. Sumitomo Chemical has been expanding its LCP business by leveraging its market-leading technical strengths in the research and development of polymer materials and their applications to meet market needs.
In recent years, LCP has garnered attention as a material for such things as power devices to meet increased electrical demand and the shift to EVs, next-generation millimeter-wave radar for autonomous driving, and high-capacity connectors for data centres. From this, the LCP market is expected to achieve further growth.
The LCP neat resin product technology Sumitomo Chemical has acquired from Syensqo is known for its high heat resistance. In addition, by utilising Syensqo's LCP development pipeline and production technology, Sumitomo Chemical expects to expand its product line-up, not only in the ICT and mobility fields, but also across a wide range of applications.
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