LANXESS has signed an agreement to sell its urethane systems business to Japan-based UBE Corporation for an enterprise value of €460 million.
The transaction is expected to generate proceeds of approximately €500 million. The move signifies LANXESS’ complete exit from the polymer sector, aligning with its strategy to focus solely on specialty chemicals.
Global Operations to Transfer
The sale includes five manufacturing sites worldwide, along with application laboratories located in the USA, Europe, and China.
UBE Corporation will assume control of all operations and integrate approximately 400 employees into its workforce.
Over the last twelve months ending June 2024, the Urethane Systems business reported sales of around €250 million.
Strengthening Financial Health
LANXESS plans to use the proceeds from this transaction to reduce its net debt, thereby improving its financial position.
The company anticipates a reduction of its leverage ratio (net debt/EBITDA pre) by approximately 0.5x.
Leadership Highlights Strategic Shift
Matthias Zachert, Chairman of the Board of Management of LANXESS AG said, “The sale of Urethane Systems marks another milestone in our rapid transformation into a pure-play specialty chemicals company. By divesting the last polymer business in our portfolio, we reinforce our strategic direction. At the same time, this transaction strengthens our balance sheet by significantly reducing net debt. We are confident UBE Corporation will unlock greater growth and development opportunities for the Urethane Systems business”.
Awaiting Regulatory Approval
As per the press release, the deal is subject to regulatory approval, with LANXESS expecting the transaction to close in the first half of 2025.
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