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 $1.575 billion.
Following the completion of the transaction, Daicel will own 100% of Polyplastics.
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 are 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,” he added.
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 $500 million to its existing share repurchase authorization. The additional authorization represents approximately 5% of the Company’s shares outstanding.
Prior to this increase, approximately $1.063 billion remained on the existing share repurchase authorization which remains available in addition to the new $500 million share repurchase authorization, bringing the total authorization to $1.563 billion, or approximately 15% of the Company’s shares outstanding.