DL Chemical, Kraton: DL to acquire Kraton in USD 2.5 billion deal
DL Chemical Co., Ltd. a subsidiary of DL Holdings Co., Ltd. (formerly Daelim Industrial Co., Ltd.), will acquire 100 % of US company Kraton in an all-cash transaction implying an enterprise value of approximately USD 2.5 billion. Kraton stockholders will receive USD 46.50 in cash for each share. As part of the transaction DL Chemical has conveyed that they have fully committed financing. This was announced by the companies on 27 September 2021.
"Following an extensive review of a wide-range of strategic alternatives focused on maximizing value for the benefit of our stockholders, Kraton's Board has determined that the sale of Kraton to DL Chemical is in the best interest of Kraton stockholders. We believe the transaction provides immediate and certain value for Kraton stockholders, and represents an attractive premium of approximately 50 % over Kraton's unaffected market valuation as of early July," said Kevin M. Fogarty, Kraton's President and Chief Executive Officer. "Moreover, we believe DL Chemical has the industry presence and resources to continue to support the growth of Kraton's business on a global scale".
In March 2020 DL Chemical (at that time part of Daelim Industrial Co., Ltd) already acquired Kraton's Cariflex (isoprene rubber latex and isoprene rubber) business for USD 530 million in cash. DL Chemical is based in Korea and has more than 46 years of operational experience. It was the first petrochemical firm in the country to commercialize metallocene polyethylene and polybutene, as well as the first to export polybutene technology to the US. The company is one of the world's largest producers of polybutene with a production capacity of 200 000 t/y.
"DL Chemical has been conducting the petrochemical business responsibly within the DL Group for 46 years. After acquiring Kraton's Cariflex business last year, we have successfully integrated that business within the DL Group," said Sang Woo Kim, Vice Chairman and CEO of DL Chemical. "We also have been highly interested in Kraton's specialty polymer and bio-based chemical business, and this combination will allow us to provide our customers with a wider range of innovative products, while adding the ability to serve a diverse range of end markets in over 70 countries worldwide."
The Kraton deal will put DL Chemical a step closer to its goal to become one of the world's top 20 chemicals companies. In June 2021 DL signed a deal with US company REXtac for the formation of a JV to construct and operate an Amorphous Poly Alpha Olefin (APAO) manufacturing plant located in Yeosu Industrial Complex, South Korea. Together with LyondellBasell DL Chemical runs PolyMirae (founded in 2000) a 50:50 JV for the production of polypropylene.