Germany: Synthetic Rubber Production Lanxess and Saudi Armaco Complete Joint Venture Deal

Editor: Alexander Stark

The specialty chemicals company Lanxess and Saudi Aramco have completed the formation of their 50-50 joint venture for synthetic rubber, Arlanexo.

Related Vendors

Cologne/Germany – The deal, which was first announced in September 2015, has been cleared by all relevant antitrust authorities in February 2016. With the closing of the transaction, a 50 % share in the joint venture Arlanexo was transferred to Dutch Saudi Aramco subsidiary, Aramco Overseas Holdings Coöperatief. In turn, Lanxess received cash proceeds of approx. € 1.2 billion.

Lanxess plans to invest about € 400 million of the proceeds from the transaction in organic growth. Another roughly € 400 million is earmarked for a further reduction of its financial debt position and around € 200 million are planned to be used for a share buyback program.

With the launch of Arlanexo, the composition of the company’s Shareholders‘ Committee was also announced. It is chaired by Lanxess’ Chairman of the Board of Management Matthias Zachert. Warren W. Wilder, Vice President Chemicals at Saudi Aramco, is Vice Chairman. The additional members of Arlanexo’s Shareholders’ Committee are Michael Pontzen, Lanxess’ Chief Financial Officer, and Khalid H. Al-Dabbagh, Controller at Saudi Aramco.