MOSCOW (MRC) -- German chemical company Lanxess is discussing the sale of a minority stake in its synthetic-rubber unit with potential buyers including Saudi Arabian Oil Co., according to people with knowledge of the matter, reported Hydrocarbonprocessing.
Two proposals have already been submitted, with one party interested in a stake of about 40%, said two people, who asked not to be identified because details of the sale process are private. Lanxess confirmed in an e-mailed statement that it’s in talks with potential partners for its synthetic-rubber business, which generated about EUR4.5 billion (USD5.1 billion) in 2014 sales. The company didn't give more details.
Lanxess CEO Matthias Zachert is looking for a partner with access to cheap crude-oil and gas-related raw materials amid overcapacity and pressure on prices in the market for synthetic rubber used in car tires.
Saudi Aramco, the world’s largest crude exporter, would have the financial clout to aggressively expand the business globally to take on low-cost competitors in emerging markets, including India’s Reliance and Russia’s Sibur.
For Saudi Aramco, teaming up with Lanxess would be a significant step in its ambition to move from oil production toward chemicals and products closer to the consumer. It would help the company emulate petrochemical maker Saudi Basic Industries Corp., which set up a partnership with ExxonMobil in 1980.
As MRC informed before, in July 2013, Lanxess opened ts first production facility in Russia. In the new plant at the Lipetsk site, Lanxess subsidiary Rhein Chemie manufactures polymer-bound rubber additives for the markets in Russia and the Commonwealth of Independent States (CIS), primarily for the automotive and tire industries. A production facility for the bladders used in tire production is to be added in 2016. The overall investment volume in euros amounts to a seven-digit figure.
Lanxess is a leading specialty chemicals company with sales of EUR 8.3 billion in 2013 and roughly 17,300 employees in 31 countries. The company is currently represented at 52 production sites worldwide. The core business of Lanxess is the development, manufacturing and marketing of plastics, rubber, intermediates and specialty chemicals.
MRC