Sector News

Lanxess, Aramco complete deal to create synthetic rubber JV

April 4, 2016
Chemical Value Chain

Lanxess and Saudi Aramco have completed the formation of the companies’ previously announced 50-50 synthetic rubber joint venture, Arlanxeo (Maastricht, Netherlands).

The deal was announced in September 2015 and the jv had received all relevant antitrust approvals by February 2016.

Aramco effectively acquired a 50% stake in Lanxess’s synthetic rubber business, to create Arlanxeo. A 50% share of the jv has been transferred to a Dutch subsidiary of Aramco. Lanxess, in return, has received cash proceeds of about €1.2 billion.

Lanxess says it plans to invest about €400 million of the proceeds from the transaction in organic growth, use €400 million of the proceeds to repay debt, and spend about €200 million on a share buyback program. Forming the jv marks Aramco’s entry into the synthetic rubber industry.

Lanxess chairman Matthias Zachert chairs Arlanxeo’s sharehoders’ committee and Warren Wilder, v.p./chemicals at Aramco is vice chairman of the shareholders’ committee. The committee has two other members. Lanxess and Aramco announced Arlanxeo’s executive team last month.

Arlanxeo is expected to have sales of about €3 billion/year.

By Ian Young

Source: Chemical Week

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