LANXESS to Sell Urethane Systems Business to UBE Corporation for €460 Million, Strengthening Focus on Specialty Chemicals

LANXESS to Sell Urethane Systems Business to UBE Corporation for €460 Million, Strengthening Focus on Specialty Chemicals

(IN BRIEF) LANXESS has signed a contract to sell its Urethane Systems business to Japan’s UBE Corporation for an enterprise value of €460 million, with expected proceeds around €500 million. This sale allows LANXESS to exit its last polymer business segment and marks a significant step in its transition to a pure-play specialty chemicals company. The Urethane Systems business includes five manufacturing sites and application laboratories in the USA, Europe, and China, employing approximately 400 people. The company plans to use the proceeds to reduce its net debt, which will likely decrease its leverage ratio by about 0.5x. The transaction is pending approval from relevant authorities, with completion expected in the first half of 2025.

(PRESS RELEASE) COLOGNE, 3-Oct-2024 — /EuropaWire/ — LANXESS, a leading specialty chemicals company, has entered into a contract to sell its Urethane Systems business to Japan’s UBE Corporation. The enterprise value of the transaction is set at €460 million, with anticipated proceeds of approximately €500 million. This strategic move marks LANXESS’s exit from its last remaining polymer business segment.

The Urethane Systems business encompasses five manufacturing facilities globally, along with application laboratories located in the USA, Europe, and China. Upon completion of the transaction, UBE Corporation will assume control of all operations, including a workforce of around 400 employees. Over the past twelve months ending in June 2024, the Urethane Systems business generated sales of roughly €250 million.

The proceeds from this sale will be utilized to decrease LANXESS’s net debt, resulting in an expected reduction of about 0.5x in the company’s leverage ratio (net debt/EBITDA pre).

“The divestment of Urethane Systems represents a significant step in our rapid transformation into a pure-play specialty chemicals enterprise, as we eliminate our final polymer business from our portfolio. We believe that UBE will provide the Urethanes business with improved growth and development opportunities,” stated Matthias Zachert, Chairman of the Board of Management at LANXESS AG. “Concurrently, we are committed to fortifying our balance sheet through the reduction of our net debt.”

This transaction is subject to the approval of the appropriate regulatory authorities, with LANXESS anticipating its completion in the first half of 2025.

About LANXESS
LANXESS is a leading specialty chemicals company with sales of EUR 6.7 billion in 2023. The company currently has about 12,500 employees in 32 countries. The core business of LANXESS is the development, manufacturing and marketing of chemical intermediates, additives and consumer protection products. LANXESS has achieved leading positions in the Dow Jones Sustainability Index and the MSCI ESG and ISS ESG ratings, among others, for its commitment to sustainability.

Forward-Looking Statements
This company release contains certain forward-looking statements, including assumptions, opinions, expectations and views of the company or cited from third party sources. Various known and unknown risks, uncertainties and other factors could cause the actual results, financial position, development or performance of LANXESS AG to differ materially from the estimations expressed or implied herein. LANXESS AG does not guarantee that the assumptions underlying such forward-looking statements are free from errors, nor does it accept any responsibility for the future accuracy of the opinions expressed in this presentation or the actual occurrence of the forecast developments. No representation or warranty (expressed or implied) is made as to, and no reliance should be placed on, any information, estimates, targets and opinions contained herein, and no liability whatsoever is accepted as to any errors, omissions or misstatements contained herein, and accordingly, no representative of LANXESS AG or any of its affiliated companies or any of such person’s officers, directors or employees accepts any liability whatsoever arising directly or indirectly from the use of this document.

Media Contacts:

Alexander Böhm
Spokesperson Financial & Business Media
+49 221 8885 4746
alexander.boehm@lanxess.com

Ingo Drechsler
Head of External Relations, Spokesperson
+49 221 8885 3790
ingo.drechsler@lanxess.com

SOURCE: LANXESS