Celanese Corporation, a global specialty chemicals and materials company, announced plans to acquire the majority of DuPont’s Mobility & Materials business for $11.0 billion in cash.
Celanese will acquire a broad portfolio of engineering thermoplastics and elastomers, industry-renowned brands and intellectual property, global manufacturing assets and a world-class organization.
“The acquisition of the M&M business is an important strategic step and establishes Celanese as the world’s leading specialty materials company,” said Lori Ryerkerk, CEO of Celanese.
“For nearly a decade, we have implemented, improved and increasingly expanded the engineered materials business model to drive shareholder value. M&M will be a high quality addition to EM and will open up significant opportunities to generate more value for customers and shareholders. We look forward to welcoming the M&M team to Celanese and jointly increasing the future growth and cash generation of Celanese’s combined portfolio.
Tom Kelly, senior vice president of engineered materials at Celanese, said the M&M business is a complementary specialty materials asset unique to EM, spanning product, geography and end market. “This acquisition significantly enhances EM’s product portfolio by adding new polymers, industry-leading brands, advanced product technology and upstream integration into critical polymers. We look forward to combining M&M’s product and technology leadership with EM’s business excellence and customer engagement model to accelerate our growth in high value applications including mobility, connectivity and future medical. “, he added.
The M&M business is a global producer of engineering thermoplastics and elastomers for a variety of end uses, including automotive, electrical and electronics, consumer goods and industrial applications. The acquired M&M product portfolio includes many specialist materials with world leading positions in nylons (PA 66, PA 6), specialty nylons (HPPA, LCPA, filaments), polyesters (PET and PBT) and elastomers ( CPT and EAE). The M&M portfolio is highly functionalized to meet a wide variety of application specifications and is backed by a leading intellectual property portfolio and technology organization.
Under the terms of the definitive agreement, Celanese will acquire the majority of the M&M business for a purchase price of $11.0 billion, without cash or debt. As part of the transaction, Celanese will acquire the following:
- A global production network of 29 facilities, including compounding and polymerization
- Customer and supplier contracts and agreements
- Industry-leading intellectual property portfolio comprising approximately 850 patents with associated technical and R&D assets
- Approximately 5,000 highly skilled employees in manufacturing, technical and sales organizations
In the first four years following the closing of the transaction, Celanese expects to realize synergies of approximately $450 million from the complementarity of businesses. The acquisition is expected to be immediately accretive to adjusted earnings per share with an expected revaluation of $4.00 or more per share once full synergies are realized by 2026.
The acquisition is expected to be fully funded by committed debt financing at the time of closing. Significant free cash flow expansion and rapid deleveraging are expected to reduce total debt to less than 3.0x EBITDA within two years of closing the transaction.
“Robust and growing cash generation and a strong balance sheet allow us to fully fund this acquisition with committed debt financing while maintaining our investment grade credit profile,” said Scott Richardson, executive vice president and chief financial officer. “M&M has always been a strong cash flow generator. We are confident in our ability to capture the synergies that would enable us to double Celanese’s total free cash flow over the next five years. »
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