Saudi Arabia: Synthetic Rubber Production Lanxess to Sell Stake in Arlanxeo to Saudi Aramco
Lanxess announced plans to sell its remaining 50 % stake in Arlanxeo to its joint venture partner Saudi Aramco. The two companies, that founded Arlanceo in 2016 as a 50:50 joint venture for synthetic rubber, signed a respective agreement.
Cologne/Germany — The transaction is subject to approval of the relevant antitrust authorities. At the same time, information or consultation of the competent employee representative bodies will take place. The parties expect to complete the envisaged transaction by the end of 2018.
The total joint venture is valued at $ 3.48 billion. The German speciality chemicals group expects to receive approximately $ 1.63 billion in cash after deducting debt and other financial liabilities for its 50 % share. The company stated that it plans to use the proceeds to strengthen its financial basis and reduce net financial debt.
Originally, Lanxess and Saudi Aramco agreed on a lock-up period until 2021 for both partners. Matthias Zachert, Chairman of the Board of Management said that with the envisaged transaction the company would complete an important milestone in their strategic transformation earlier than originally planned. The transaction allowed them to strengthen their position in mid-sized specialty chemicals markets, as well as to increase the resilience of the business, strengthen the financial basis and gain additional strategic flexibility for further growth.
Headquartered in Maastricht/ The Netherlands, Arlanxeo generated sales of around $ 3.72 billion in 2017 and employs about 3,800 people at 20 production sites in nine countries. The company produces high-performance rubber for use in, for example, the automotive and tire industries, the construction industry, and the oil and gas industries.
Back in 2016, the transfer of the business with synthetic rubber into the joint venture was the foundation for Lanxess’ strategic realignment. Since then the company has been focusing on growth in mid-sized specialty chemicals markets and made various acquisitions in this area — with the takeover of the US chemical company Chemtura in 2017 as the biggest one.
This article is protected by copyright. You want to use it for your own purpose? Contact us at support.vogel.de (ID: 45439642)