Celanese buys DuPont engineering polymers and elastomers for $ 11 billion

Credit: Celanese

Celanese and DuPont overlap in some sectors such as electronics and automotive.

As part of a deal that will bring together two of the world’s leading engineering polymer companies, Celanese has agreed to acquire a major stake in DuPont Mobility and Materials for $ 11 billion.

The DuPont businesses, which the company put up for sale back in November, earned $ 3.5 billion in revenue in 2021 and $ 800 million in pre-tax profit. The acquisition will be a major acquisition for Celanese, which earned $ 2.8 billion in pre-tax taxes on $ 8.5 billion in revenue, more than doubling Celanese’s engineering materials, which totaled $ 2.7 billion in 2021. dollars.

Approximately 5,000 employees and 29 production sites will move to Celanese as part of a deal the company is seeking to complete by the end of the year.

The deal includes many materials used in demanding applications such as automotive and electronics. One of the key materials is the DuPont nylon 6.6 business, which has been part of DuPont for over 80 years. In addition, Celanese will receive other DuPont engineering polymers such as long chain nylon and performance, as well as polybutylene terephthalate and polyethylene terephthalate resins. Also part of the deal are polyester and ethylene-acrylic elastomers DuPont, as well as polyester films Mylar and Melinex.

“It’s a very quality business,” Scott Richardson, CEO of Celanese, told a February 18 conference with analysts. “A high-yield business that is very suitable for our engineering materials business.”

New businesses, for example, need to complement Celanese’s existing product lines in the areas of polyacetal, ultra-high molecular weight polyethylene, liquid crystal polymers and polyphenylene sulfide. The production of nylon and PBT DuPont polymers will include Celanese operations in these plants.

DuPont is also expanding Celanese’s reach in Asia, helping Celanese regain some of its presence in the region, which it abandoned when it sold its stake in Polyplastics Engineering Polymer’s joint venture with Japan’s Daicel. Celanese management believes it will achieve a $ 450 million synergy by integrating DuPont’s polymer business with its own.

Celanese is pushing for the development of its engineering materials business. Late last year, it acquired ExxonMobil’s Santoprene thermoplastic vulcanizer plant for $ 1.15 billion.

The companies excluded DuPont Delrin’s business from polyacetal to facilitate the approval of antitrust laws. Richardson of Celanese told analysts he did not expect regulators to demand any significant concessions to approve the deal.

DuPont now plans to sell Delrin’s business separately, with annual sales of about $ 550 million. “There is considerable interest in this high-quality asset,” DuPont CEO Edward Brin said in a statement. The company plans to sell this business in the first quarter of 2023.

Also out of the deal were Tedlar polyvinyl fluoride films used on solar panels. DuPont says it will keep this business as well as its Multibase automotive adhesives and additives business.

DuPont plans to use the proceeds to pay for the purchase of electronic materials manufacturer Rogers Corp. for $ 5.2 billion, and to fund further acquisitions and share repurchases. Celanese buys DuPont engineering polymers and elastomers for $ 11 billion

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