Celanese acquires most of DuPont Mobility & Materials’ business for $ 11 billion – Chemical Engineering

cellulose Corp. (Dallas, Texas) Announces Final Acquisition Agreement for Most1 Mobility & Materials (M&M) Shares DuPont (Wilmington, Del.) For $ 11.0 billion in cash. Celanese will acquire a broad portfolio of engineering thermoplastics and elastomers, industry-leading brands and intellectual property, world-class manufacturing assets and a world-class organization.

“The acquisition of M&M is an important strategic step forward and makes Celanese an outstanding global specialty materials company,” said Lori Rierkerk, Chairman and CEO. “For almost a decade, we have been implementing, refining and increasingly expanding the commercial model of engineering materials (“ EM ”) to create value for shareholders. M&M will be a quality addition to EM and will open up significant opportunities to create added value for customers and shareholders. We are pleased to welcome the M&M team to Celanese and jointly enhance the future growth and cash generation of the combined Celanese portfolio. ”

“M&M’s business is a unique complementary asset of specialty materials for EM that spans product, geography and end market,” said Tom Kelly, senior vice president of materials engineering. “This acquisition significantly expands the portfolio of EM products by adding new polymers, well-known industry brands, advanced product technologies and reverse integration into critical polymers. We are committed to combining M&M product and technology leadership with the commercial and customer engagement model to accelerate our growth in high-end applications, including future mobility, connectivity and healthcare. ”

M&M is the world’s leading manufacturer of engineering thermoplastics and elastomers for a variety of end-uses, including automotive, electrical and electronics, consumer goods and industrial applications. The acquired M&M product portfolio includes many specialty materials that are world leaders in nylon (PA 66, PA 6), specialty nylons (HPPA, LCPA, yarns), polyesters (PET and PBT) and elastomers (TPC and EAE). The M&M portfolio is highly functionalized to meet a wide range of application specifications and is supported by a leading intellectual property portfolio and technology organization.

Under the terms of the final agreement, Celanese will acquire most of M&M’s business at a purchase price of $ 11.0 billion on a non-cash basis without debt. As part of the deal, Celanese will acquire the following:

  • Worldwide production network of 29 facilities, including compounding and polymerization
  • Contracts and agreements with customers and suppliers
  • Leading the industry’s intellectual property portfolio, including about 850 patents with relevant technical and research assets
  • About 5,000 highly qualified employees in production, technical and commercial organizations

Within the first four years after the completion of the deal, Celanese expects to achieve synergies of approximately $ 450 million as a result of business complementarity. The acquisition is expected to immediately reach adjusted earnings per share with an expected increase of $ 4.00 or more per share as soon as full synergy is achieved by 2026.

It is expected that the acquisition will be fully financed by debt financing at the time of closing. It is expected that a significant increase in free cash flow and a rapid reduction in debt will support the reduction of total debt to below 3.0x EBITDA within two years after the close of the transaction.

“Reliable and growing cash generation and a strong balance sheet allow us to fully finance this acquisition by financing debt, while maintaining our investment-grade credit profile,” said Scott Richardson, executive vice president and chief financial officer. “M&M has historically been a strong cash flow generator. We are confident in our ability to achieve synergies that will allow us to double Celanese’s total free cash flow over the next five years ”.

The transaction is subject to approval by regulatory authorities and the usual terms of closing. The deal is expected to be completed around the end of 2022.

DuPont has agreed to retain and cover Celanese’s specific commitments, including commitments related to PFAS.

Celanese is advised by Kirkland & Ellis LLP as Chief Legal Adviser, Gibson, Dunn & Crutcher LLP as Financial Advisor and BofA Securities as Financial Advisor. Celanese acquires most of DuPont Mobility & Materials’ business for $ 11 billion – Chemical Engineering

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