Celanese has agreed to acquire the bulk of DuPont’s Mobility and Materials unit for $11 billion, combining two of the world’s leading engineering polymers businesses.
Included in the transaction are many materials that are used in demanding applications such as automotive and electronics parts. One key material is DuPont’s nylon 6,6 business, which has been a part of DuPont for more than 80 years.
In addition, Celanese will get other DuPont engineering polymers such as long-chain and performance nylons and its polybutylene terephthalate and polyethylene terephthalate resins. DuPont’s polyester and ethylene acrylic elastomers and its Mylar and Melinex polyester films are also part of the deal.
“This is a very high-quality business,” said Scott Richardson, Celanese’s chief financial officer on a February 18 conference call with analysts. “A high margin business that very much kind of fits hand and glove with our engineering materials business.”
The new businesses, for example, should complement existing Celanese product lines in polyacetal, ultra high molecular weight polyethylene, liquid crystal polymers and polyphenylene sulfide. DuPont’s nylon and PBT polymer production will back integrate Celanese’s compounding operations in those businesses.
DuPont will also extend Celanese’s reach in Asia, helping Celanese to recover some of the presence in the region it relinquished when it sold its stake in the Polyplastics engineering polymer joint venture with Japan’s Daicel. Celanese management thinks that it will achieve $450 million worth of synergies by integrating DuPont’s polymer businesses with its own.
Celanese has been making a push to grow its engineered materials business. Late last year, it purchased ExxonMobil’s Santoprene thermoplastic vulcanizates business for $1.15 billion.
The companies left DuPont’s Delrin polyacetal business out of the deal to ease antitrust approval. Celanese’s Richardson told analysts that he doesn’t expect regulators to require any meaningful concessions in order to rubber-stamp the transaction.
DuPont now plans to market the Delrin business, which has annual sales of about $550 million, separately. “There is substantial interest in this high-quality asset,” DuPont CEO Edward Breen said in a statement. The company anticipates selling that business by the first quarter of 2023.
Also left out of the transaction was Tedlar polyvinyl fluoride films, used on solar panels. DuPont says it will keep that business, as well as its automotive adhesives and its Multibase additives business.
DuPont plans to use the proceeds to pay for its pending $5.2 billion purchase of the electronic materials producer Rogers Corp., and to finance further acquisitions and share buybacks.
The DuPont businesses, which the company earmarked for sale back in November, had total 2021 revenues of $3.5 billion and profits before taxes of $800 million. The purchase will be a major acquisition for Celanese, which earned $2.8 billion before taxes on $8.5 billion in revenues, and it will more than double Celanese’s engineered materials unit, which had $2.7 billion in turnover in 2021.
Roughly 5,000 employees and 29 manufacturing sites will move to Celanese in the deal, which companies aim to complete around the end of the year.