Lanxess to sell remaining stake in joint venture Arlanxeo to Saudi Aramco
Lanxess announced that it plans to sell its remaining 50 % stake in Arlanxeo to its joint venture partner Saudi Aramco. The two companies, that founded Arlanxeo in 2016 as a 50:50 joint venture for synthetic rubber, signed a respective agreement on 8 August 2018.
The transaction is still subject to approval of the relevant antitrust authorities. At the same time, information or consultation of the competent employee representative bodies will take place, said Lanxess. The parties expect to complete the envisaged transaction by the end of 2018.
The total joint venture Arlanxeo is valued at EUR 3.0 billion. Lanxess expects to receive approximately EUR 1.4 billion after deducting debt and other financial liabilities for its 50 % share. Lanxess said 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. “With the envisaged transaction we would complete another important milestone of our strategic transformation earlier than originally planned. This should allow us to even better focus on our position as a leading player in mid-sized specialty chemicals markets,” said Matthias Zachert, Chairman of the Board of Management. “At the same time, we increase the resilience of our business, strengthen our financial basis and gain additional strategic flexibility for further growth.“
Headquartered in Maastricht, The Netherlands, Arlanxeo generated sales of around EUR 3.2 billion in 2017 and employs about 3,800 people at 20 production sites in nine countries. The company produces synthetic rubber for use in, e.g., the automotive and tyre 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 Arlanxeo was the foundation for Lanxess’ strategic realignment. Since then, Lanxess has been focusing on growth in mid-sized speciality chemicals markets and made various acquisitions in this area – with the takeover of the US chemical company Chemtura in 2017 as the biggest one.