Celanese Corporation (NYSE: CE), a global chemical and specialty materials company, today announced the signing of a definitive agreement to acquire a majority1 of the Mobility & Materials (“M&M”) business of DuPont for $11.0 billion in cash. Celanese will acquire a broad portfolio of engineered thermoplastics and elastomers, industry-renowned brands and intellectual property, global production assets, and a world-class organization.
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“The acquisition of the M&M business is an important strategic step forward and establishes Celanese as the preeminent global specialty materials company,” said Lori Ryerkerk, Chairman and Chief Executive Officer.
For nearly a decade, we have implemented, enhanced, and increasingly extended the Engineered Materials (“EM”) commercial model to generate shareholder value. M&M will be a high-quality addition to EM and will unlock significant opportunities to generate further customer and shareholder value. We are eager to welcome the M&M team to Celanese and jointly elevate the future growth and cash generation of the combined Celanese portfolio.
Lori Ryerkerk, Chairman and Chief Executive Officer
“The M&M business is a uniquely complementary specialty materials asset to EM, spanning product, geography, and end-market,” said Tom Kelly, Senior Vice President Engineered Materials.
“This acquisition greatly enhances the EM product portfolio by adding new polymers, industry-renowned brands, leading product technology, and backward integration in critical polymers. We are eager to combine the product and technology leadership of M&M with the commercial excellence and customer engagement model of EM to accelerate our growth in high-value applications including future mobility, connectivity, and medical.”
Transaction Overview
The M&M business is a leading global producer of engineering thermoplastics and elastomers serving a variety of end-uses including automotive, electrical and electronics, consumer goods, and industrial applications. The acquired M&M product portfolio includes numerous specialty materials with global leadership positions in nylons (PA 66, PA 6), specialty nylons (HPPA, LCPA, filaments), polyesters (PET and PBT), and elastomers (TPC and EAE).
The M&M portfolio is highly functionalized to meet a wide variety of application specifications and is supported by a leading intellectual property portfolio and technology organization.
According to the terms of the definitive agreement, Celanese will acquire a majority of the M&M business for a purchase price of $11.0 billion on a cash-free, debt-free basis. 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 including approximately 850 patents with associated technical and R&D assets
- Approximately 5,000 highly-skilled employees across the manufacturing, technical, and commercial organizations
Within the first four years following the close of the transaction, Celanese expects to achieve run-rate synergies of approximately $450 million as a result of the highly complementary fit of the businesses.
The acquisition is expected to be immediately accretive to adjusted earnings per share with anticipated accretion of $4.00 or more per share once full synergies are achieved by 2026.
The acquisition is expected to be fully-financed with committed debt financing at the time of closing. Significant expansion of free cash flow and swift deleveraging is expected to support a reduction of total debt to below 3.0x EBITDA within two years of closing the transaction.
“Robust and growing cash generation and a strong balance sheet enable us to fully finance this acquisition with committed debt financing while maintaining our investment grade credit profile,” said Scott Richardson, Executive Vice President, Chief Financial Officer.
M&M has historically been a strong generator of cash flow. We are confident in our ability to capture synergies that would allow us to double Celanese total free cash flow within the next five years.
Scott Richardson, Executive Vice President, Chief Financial Officer
Additional Transaction Details
The transaction is subject to regulatory approvals and customary closing conditions. The transaction is expected to close around the end of 2022.
DuPont has agreed to retain and indemnify Celanese for certain liabilities, including liabilities relating to PFAS.
Celanese is advised by Kirkland & Ellis LLP as principal legal counsel, Gibson, Dunn & Crutcher LLP as financing counsel, and BofA Securities as financial advisor.
Conference Call
Celanese management will host a conference call on Friday, February 18 at 8:30 a.m. Eastern time.
The Company’s presentation and accompanying prepared remarks covering this transaction can be found on its website at investors.celanese.com under News & Events/Events Calendar. This call will be available by webcast at https://investors.celanese.com or by phone:
Dial-in Number: 1-877-407-0989
International Dial-In Number: 1-201-389-0921
Ask for the Celanese Webcast
Alternatively, to enter the call immediately without waiting for operator assistance, attendees may pre-register for the call by clicking the link below.
Registrant link:
http://services.incommconferencing.com/DiamondPassRegistration/register?confirmationNumber=13727383&linkSecurityString=11dc30980c
A replay of the conference call will be available on demand on February 18, 2022, from 10:30 a.m. Eastern time until March 4, 2022, 12:00 a.m. Eastern time, at the following number:
Replay Number: 1-877-660-6853
Passcode: 13727383
The replay and transcript will be available on demand at investors.celanese.com. The materials will be furnished with the Securities and Exchange Commission on a Form 8-K prior to the call.
1 Excluding the Delrin® POM, Tedlar® PVF, Multibase, and Auto Adhesives & Fluids businesses.