Celanese to Buy DuPont’s Materials Arm for $11 Billion

(Bloomberg) -- Celanese Corp. agreed to buy the majority of DuPont de Nemours Inc.’s mobility and materials arm for $11 billion in cash, the company’s biggest-ever acquisition.

The deal not only broadens Celanese’s production of specialty chemicals and boosts its earnings, it also advances DuPont’s ongoing efforts to re-focus its business through a string of divestitures.

The agreement announced Friday confirms an earlier Bloomberg News report that the companies were close to a deal. The unit had also attracted interest from private equity firms including Apollo Global Management Inc. and Carlyle Group Inc.

Celanese shares initially rose Friday and then fell 5.8% to $144.11 at 3:49 p.m. in New York trading, giving the company a market value of $15.6 billion. DuPont shares jumped as much as 5.5% and then also fell, sinking 1.4% to $78.63.

Texas-based Celanese makes chemicals and other products for use in everything from cigarette filters to paints, while the DuPont unit it’s buying produces polymers and resins for vehicles, electronics, consumer products and other applications.

‘Strategic Step’

“The acquisition of the M&M business is an important strategic step forward and establishes Celanese as the preeminent global specialty materials company,” Chairman and Chief Executive Officer Lori Ryerkerk said in a statement.

Celanese predicts the purchase will generate about $450 million of synergies within the four years following the close of the deal, and add $4 or more to adjusted earnings per share by 2026.

The deal is a “highly complementary fit on the customer side” for Celanese, Bloomberg Intelligence senior industry analyst Jason Miner said in a note. The deal will fill out the product offerings of the company’s engineered materials unit, he said. 

“The key question will be cost and chemicals synergies, as many DuPont products stray from Celanese’s tightly integrated acetyls chain,” Miner said.

Biggest Deals

The transactions ranks among the 10 biggest M&A deals of the year and the largest chemicals deal since 2020, according to data compiled by Bloomberg. DuPont worked with Goldman Sachs Group Inc. on the sale while Celanese was advised by Bank of America Corp.

When DuPont agreed in November to pay about $5.2 billion for Rogers Corp., it announced plans to sell most of the mobility and materials unit. DuPont intends to use the proceeds from the sale to fund the Rogers purchase, as well as further M&A opportunities and continuing share repurchases.

DuPont is separately moving ahead with the sale of its Delrin business, with a target closing date in the first quarter of 2023.

DuPont Chief Executive Officer Ed Breen, a serial dealmaker, has transformed the company into a business focused on electronics, automotive and water and industrial technologies. He led the 2017 tie-up of DuPont and Dow Chemical Co., the largest-ever chemicals industry merger, and the subsequent breakup that formed three standalone companies.

Celanese’s origins date to 1912, with its first products including paints and fabrics for airplanes and zeppelins, according to the company’s website. In the following decades it acquired and spun off businesses, including drugmaker Celgene Corp. in 1986. Celanese was acquired by Hoechst AG in 1987 and then spun off as a public company in 1999.

Buyout firm Blackstone took Celanese private in 2004 and then made it public again the following year.

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