Lanxess selling Arlanxeo stake to Saudi Aramco

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Lanxess AG plans to sell its remaining 50% stake in Arlanxeo to its joint venture partner Saudi Aramco, the German polymer and chemicals group has announced.

The two companies, that founded the 50:50 synthetic rubber JV in 2016, signed a respective agreement 8 Aug.

With the Arlanxeo JV valued at €3.0 billion, Lanxess said it expects to receive around €1.4 billion in cash after deducting debt and other financial liabilities for its 50% share.

Completion is expected by the end of 2018, though Lanxess said the transaction requires approval by antitrust authorities and that consultations with employee representative bodies are also to take place.

If the deal is finalised, Lanxess said it plans to use the proceeds to strengthen its financial basis and reduce net financial debt.

In establishing Arlanxeo, the two partners originally agreed on a lock-up period until 2021 for the JV.

“With the envisaged transaction we would complete another important milestone of our strategic transformation earlier than originally planned,” said Matthias Zachert, chairman of Lanxess.

“This should allow us to even better focus on our position as a leading player in mid-sized specialty chemicals markets,” added Zachert.

Headquartered in Maastricht, The Netherlands, Arlanxeo generated 2017 sales of around €3.2 billion. It employs about 3,800 people at 20 production sites worldwide, producing synthetic rubber for industries including automotive, tires, construction and oil & gas.

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