Lanxess is in negotiations to spin its synthetic rubber business into a possible joint venture with Ineos, according to a Reuters report, citing people familiar with the matter. Further details have not been disclosed.
The talks with Ineos are not exclusive and Lanxess remains in discussion with several other prospective partners for its rubber business, the report says. Lanxess has asked all of the candidates to submit final offers in the next few weeks and a possible deal could be signed soon, the report says. Lanxess and Ineos declined to comment on the report.
CW reported in February that Lanxess was in separate talks with Nizhnekamskneftekhim (Nizhnekamsk, Russia) and Saudi Aramco on a potential synthetic rubber jv. Earlier reports also said that Lanxess was discussing a possible rubber jv with Sibur (Moscow).
Lanxess announced in November 2014 a three-phase realignment program, inlcuding about 1,000 job cuts. The third phase of the program aims to improve the competitiveness of Lanxess’s portfolio and it includes “horizontal and vertical cooperations in the rubber business” to be implemented in 2015-16, the company said at the time of the announcement.
Lanxess chairman Matthias Zachert confirmed last month that the company was “engaged in very constructive discussions” on a potential alliance for the rubber business and said he assumed that the company would “achieve concrete results in the course of the second half of the year.” Lanxess has begun a carveout to transfer its rubber business to a legally independent business entity, in preparation for an alliance. The new entity will consist of the existing tire and specialty rubbers, and high-performance elastomers business units. The entity will have 20 production facilities and about 3,700 employees. Lanxess’s synthetic rubber products include butyl rubber, chloroprene rubber, ethylene propylene diene monomer rubber, and nitrile butadiene rubber, as well as emulsion- and solution-styrene butadiene rubber. The company has estimated synthetic rubber sales of about €4.5 billion/year.
Ineos does not have a synthetic rubber business but it produces a number of the necessary raw materials, such as acrylonitrile, butadiene, and ethylidiene norbornene. Ineos bought Lanxess’s acrylonitrile butadiene styrene business through a phased purchase in 2007-09.
By Ian Young
Source: Chemical Week
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