Under a newly formed joint venture, Lanxess and Saudi Aramco are to focus on the supply and development of synthetic rubber. The two companies will each hold a 50% interest in the venture and Saudi Aramco is to pay approximately 1.2bn euro in cash for its 50% share after deducting debt and other financial liabilities. The total joint venture is valued at 2.75bn euro and the transaction is expected to be complete in the first half of 2016.
Lanxess will contribute its synthetic rubber business, which will include the tire and specialty rubbers and high performance elastomers business units, its 20 production facilities in nine countries, and some 3,700 employees and additional support staff. Saudi Aramco will provide the joint venture with competitive and reliable access to strategic raw materials over the medium term.
The new joint venture will be managed by a holding company headquartered in the Netherlands for which Lanxess will appoint the CEO while Saudi Aramco will a select a new CFO. Lanxess plans to use around 400m euro of the proceeds from the transaction to invest in the growth of the advanced intermediates and performance chemicals segments.
September 24, 2015
