Looks like they sold the polymer division:
Celanese will buy DuPont's engineering polymer and elastomer businesses for $11 billion – Chemical & Engineering News
September 9, 2022 by Civil Engg Notes
In a deal that will combine two of the world’s leading engineering polymer businesses, Celanese has agreed to acquire most of DuPont’s Mobility and Materials unit for $11 billion.
The businesses, which DuPont earmarked for sale in November, had sales of $3.5 billion and profit before taxes of $800 million in 2021. The acquisition will be a major one for Celanese, which had sales of $8.5 billion last year, and will more than double the size of the firm’s engineered materials unit.
Roughly 5,000 employees and 29 manufacturing sites will move to Celanese in the deal, which the companies aim to complete around year-end.
The transaction includes many materials used in demanding applications, such as automotive and electronics parts. One key polymer is nylon 6,6, which has been a part of DuPont for over 80 years. DuPont sold its nylon fiber business in 2004. In addition, Celanese will get DuPont’s long-chain and performance nylons, polybutylene terephthalate, and polyethylene terephthalate. DuPont’s polyester and ethylene acrylic elastomers and its Mylar and Melinex polyester films are also part of the deal.
“This is a very high-quality business,” Scott Richardson, Celanese’s chief financial officer, said on a Feb. 18 conference call with analysts. “A high-margin business that very much kind of fits hand and glove with our engineered materials business.”
Celanese’s engineering polymer line includes polyacetal, ultra-high-molecular-weight polyethylene, liquid crystal polymers, and polyphenylene sulfide. DuPont’s nylon and polybutylene terephthalate production will provide raw material for Celanese’s compounding operations in those areas.
The purchase will also extend Celanese’s reach in Asia, helping the firm recover some of the presence it relinquished in 2020 when it sold its stake in the Polyplastics joint venture with Japan’s Daicel. Overall, Celanese executives say, the firm will achieve $450 million worth of annual benefits by integrating the DuPont polymer business with its own.
Celanese has been pushing to grow its engineered materials business. Late last year, it bought ExxonMobil’s Santoprene thermoplastic vulcanizate business for $1.15 billion.
Celanese and DuPont left DuPont’s Delrin polyacetal business out of the deal to ease approval from antitrust authorities. Celanese’s Richardson told analysts that he doesn’t expect regulators to require any meaningful concessions before approving the transaction.
DuPont now plans to separately market the Delrin business, which has annual sales of about $550 million. “There is substantial interest in this high-quality asset,” DuPont CEO Edward Breen says in a statement. The company expects to sell that business by the first quarter of 2023.
Tedlar polyvinyl fluoride films, used on solar panels, were also left out of the sale. DuPont says it will keep that business, as well as its auto adhesive and Multibase polymer additive businesses.
DuPont plans to use the sale proceeds to pay for its pending $5.2 billion purchase of the electronic materials firm Rogers and to finance further acquisitions and share buybacks.
Stock analysts say the deal will indeed be transformational for Celanese. With the DuPont businesses, Celanese will have the “broadest and most differentiated” portfolio of engineered materials in the world, Frank J. Mitsch of Fermium Research writes in a note to clients. In the process, Celanese’s more commodity-like acetyl chemical business will become “a smaller amount of the total pie.” Acetyls accounted for 64% of the firm’s sales in 2021.
In a report, Vertical Research Partners analyst Kevin W. McCarthy calls the purchase an “attractive strategic fit” for Celanese. “The transaction vaults Celanese to a different league on the global stage as it creates a world-class leader in engineered materials,” he writes.
McCarthy says the purchase may set the stage for future transactions. The scale that the DuPont business provides, he observes, could give Celanese “critical mass” to split off its acetyl business “at some point down the road after the incremental debt has been digested sufficiently.”
This article was originally published on Feb. 18, 2022. It was updated on Feb. 24, 2022, to include comment about the deal from stock analysts.
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