By Klaus Kobold, Associate Director, Corporate Ratings

This latest deal follows similar transactions in the sector. In 2020, BASF acquired Solvay’s polyamide business while Arkema sold its PMMA business to Trinseo. In 2019, Evonik Industries offloaded its PMMA division to private equity firm Advent International. These transactions were pursued to allow the acquirers to upgrade and realign their portfolios but also to respond, more importantly, to ESG-related topics. Only a limited amount of plastic is recycled, around 35% in the EU; around 8% in the US.

Dupont aims to become a leading player in chemicals products for electronics, water, industrial technologies, protection and Next Generation automotive. Last year, it expanded its portfolio by acquiring Laird Performance Materials. It also intends to acquire Rogers Corporation. As for the business it is now selling to Celanese, sales in 2021 were roughly USD 3.5bn and operating EBITDA was USD 800m. The business is centred around engineered polymers, resins and elastomers. Celanese will acquire a family of nylon products, high-performance polyesters, and various elastomers. The products have application in the automotive, consumer and multiple industrial markets.

Following the sale of DSM’s Resins and Functional Materials division to Covestro in April 2021, DSM intends to sell the remainder of its materials division to become a pure nutrients and life-science company. LANXESS (BBB+/Stable) may push in the same direction, since it executed two large acquisitions in its Consumer Protection division in 2021: Emerald Kalama Chemical and IFF Microbial Control business unit).

On the basis of the size of these businesses (DSM Materials 2021 revenue: EUR 1.9bn; LANXESS: Engineered Materials 2020: EUR 1.2bn), it would give additional firepower to push ambitions forward, or in the case of LANXESS, an ability for accelerated deleveraging.

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