MOSCOW (MRC) -- Celanese Corp. (Dallas, Tex.) announced it has reached a definitive agreement to sell its 45% equity investment in the Polyplastics joint venture (JV) to Daicel Corporation for USD1.575 billion, said Chemengonline.
Following the completion of the transaction, Daicel will own 100% of Polyplastics. "Celanese has been investing in and rapidly growing our base business in Engineered Materials globally over the last 10 years,” said Lori Ryerkerk, Celanese Chairman and Chief Executive Officer. “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."Celanese’s 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.
"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." Celanese is expected to deploy the proceeds from this all-cash transaction in value-generating opportunities, including the increase in share repurchases described below that will be accretive to EPS to offset earnings from the Polyplastics joint venture, investments in organic growth, and the judicious use of cash consistent with Celanese’s disciplined capital deployment strategy. Celanese 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.
Celanese also announced that its Board of Directors has approved an increase of USD500 million to its existing share repurchase authorization. The additional authorization represents approximately 5 percent of the Company’s shares outstanding. Prior to this increase, approximately USD1.063 billion remained on the existing share repurchase authorization which remains available in addition to the new USD500 million share repurchase authorization, bringing the total authorization to USD1.563 billion, or approximately 15 percent of the Company’s shares outstanding.
As MRC informed earlier, Clariant, Celanese, and Orbia have been fined a total of EUR260 million (USD296 million) by the European Commission for breaching EU competition rules by participating in a cartel related to ethylene purchases in Europe. Westlake, which also participated in the cartel, received full immunity by revealing the breach, avoiding an aggregate fine of about EUR190 million, the Commission says.
Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 595,170 tonnes in the first five month of 2020, up by 10% year on year. Deliveries of all ethylene polymers, except for linear low density polyethylene (LLDPE), rose partially because of an increase in capacity utilisation at ZapSibNeftekhim. At the same time, PP shipments to the Russian market was 457,930 tonnes in January-May 2020 (calculated by the formula production minus export plus import). Deliveris of exclusively PP random copolymer increased.
Celanese Corporation is a global technology leader in the production of differentiated chemistry solutions and specialty materials used in most major industries and consumer applications. Based in Dallas, Celanese employs approximately 7,700 employees worldwide and had 2019 net sales of USD6.3 billion.