LANXESS plans to sell its 50% Alan Shinco shares to its joint venture partner Saudi Aramco. The two companies established Aram Shinco, a synthetic rubber company, in 50% of their respective investments in 2016, and today they have signed separate transaction agreements.
The transaction is subject to approval by the relevant antitrust authorities. In addition, the two companies will conduct business council discussions with relevant employee representatives and unions, and are expected to officially complete the transaction by the end of 2018.
The total market capitalization of the joint venture, Alang Shinco, is 3 billion euros. After deducting the borrowings and other financial liabilities associated with its 50% stake, LANXESS expects to receive approximately 1.4 billion euros in cash in this transaction.
LANXESS plans to use this revenue to consolidate its financial base and reduce its net debt.
Initially, LANXESS and Saudi Aramco reached an agreement to lock in the 2021 period. The chairman of LANXESS' management board, Mr. Chang Mutian, said: 'The deal in this plan marks another important milestone on the road to strategic advancement. , which will allow us to focus more on the leading position in the medium-sized specialty chemicals market. At the same time, we will also enhance the resilience of our business, consolidate the financial base, and ensure greater strategic flexibility. Prepare for future growth. '
Headquartered in Maastricht, the Netherlands, Alang Shinco has 20 production sites in 9 countries, with approximately 3,800 employees and sales of approximately 3.2 billion euros in 2017. The company mainly produces automotive tires. , high performance rubber for construction and oil and gas industries.
In 2016, through the integration of the synthetic rubber business into the joint venture Alang Shinco, LANXESS laid the foundation for its strategic adjustment plan. Since then, LANXESS has been committed to developing a medium-sized specialty chemicals market and has completed many projects in this field. The acquisition, the largest of which was the acquisition of Chemtura Chemicals in 2017.