M&As: Celanese sells stake in Polyplastics to Daicel for US$1.5 bn

US chemical/speciality materials firm Celanese Corporation is to sell its 45% equity investment in the Polyplastics joint venture to its partner Daicel Corporation for US$1.575 billion. Following the completion of the transaction, Daicel will own 100% of Polyplastics.

Since 1964, Celanese and Daicel have operated the joint venture, Polyplastics, which is headquartered in Japan, and is a supplier, manufacturer and marketer of engineered materials including acetyl copolymer (POM), liquid-crystal polymer (LCP) and polyphenylene sulphide (PPS) polymer.

Celanese says it will use part of the proceeds to fund a US$500 million share repurchase programme to its existing share repurchase authorisation. The additional authorisation represents approximately 5% of the company’s shares outstanding.

The firm also said its Engineered Materials presence in Asia is significantly greater now than when the company entered the region more than 50 years ago. This definitive agreement with Daicel is an intentional departure from a legacy relationship to a contemporary approach which will drive future growth and greater customer development and expansion opportunities. Celanese will continue to compete with Polyplastics (Daicel) in markets and regions where there is overlapping product lines.

“Celanese has been investing in and rapidly growing our base business in Engineered Materials globally over the last ten years,” said Lori Ryerkerk, Celanese Chairman/CEO. “Among the advantages that set Celanese apart from our peers is our ability to leverage our unique business models and flexible strategy to deliver sustainable growth, especially in key markets served by our Engineered Materials business. We plan to use this opportunity to monetize a historically passive investment and allocate significant capital to higher growth businesses within Celanese. At the conclusion of this joint venture relationship with Daicel, we extend our gratitude for their partnership and collaboration over the past 50-plus years in jointly bringing innovative products to customers and consumers worldwide.”

“The Engineered Materials business of Celanese is well-positioned to continue its growth trajectory as we increase investment in new product development to serve customer demand in growth segments and key geographies,” said Tom Kelly, Senior Vice President, Engineered Materials, Celanese. “We will continue to invest in product expansion to serve the growing demand in applications such as 5G, advanced mobility, medical/pharma, and sustainable materials. Celanese also plans to expand its manufacturing capacity and advance its T&I capabilities in Asia to meet rapidly growing demand in the region.”

It expects to complete this transaction in the second half of this fiscal year, subject to necessary regulatory approvals and customary closing conditions. Until then, Polyplastics will continue to operate under its current joint venture ownership and management structure.

(PRA)

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