Westlake Chemical (Houston, Texas) has reached agreement to acquire Hexion’s (Columbus, Ohio) epoxy business for approximately $1.2 billion. Westlake says the deal enhances chlorine and olefins integration and brings attractive opportunities in high-growth epoxy markets, including wind turbine blades, automotive lightweighting, aerospace and consumer coating applications.
Hexion’s epoxy business posted net sales of approximately $1.5 billion in the 12-month period ended 30 September 2021. Westlake says it will fund the purchase with cash on hand. The deal is expected to close in the first half of 2022.
The deal includes nearly 1,300 associates and eight manufacturing facilities across Asia, Europe, and the US for coatings and composite products, and is expected to close in the first half of 2022, subject to customary regulatory approvals. Hexion’s epoxy business has production in Argo, Illinois; Deer Park, Texas; Lakeland, Florida; Barbastro, Spain; Onsan, Korea; Pernis, Netherlands; Duisburg, Germany; and Esslingen, Germany.
The transaction will expand Westlake’s integrated business by adding a downstream portfolio of coatings and composite products to its chlorovinyls businesses, the company says.
“Lightweighting is a critical feature for the manufacture of structural components for automobiles and for renewable energy, particularly the composite blades used by wind turbines, and epoxies are key ingredients for these sustainable products,” Albert Chao, Westlake president and CEO, says. “The industries served by Hexion epoxy are expected to be a synergistic addition to Westlake’s existing businesses.”
Hexion announced in September that it planned an initial public offering (IPO) of its adhesives and Versatic acid divisions and that it would spin off the epoxy business to shareholders.
Hexion will use proceeds from the epoxy sale to pay down debt. “With the continued strong performance of our epoxy business, and after a comprehensive evaluation of strategic actions, our board and management team have determined that this sale maximizes value for our shareholders,” says Huntsman chairman and CEO Craig Rogerson. “Hexion’s management team and its board of directors will continue to evaluate strategic value creation options for its adhesives and Versatic acid product lines, including a proposed [IPO] on the New York Stock Exchange.”
by Jameson Croteau
Source: chemweek.com
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