Lanxess Sells Polyurethane Business for €460 Million, Sending Shocks Through the Market!

Lanxess, the world's leading specialty chemical manufacturer, announced today that it has entered into a legally binding agreement to sell its polyurethane business unit to UBE Corporation, a leading Japanese chemical company. According to the agreement, the total amount of the transaction has been determined to be 460 million euros, and LANXess is expected to receive a gain of approximately 500 million euros. The move marks LANXess's full exit from the polymer business and a key step in its transformation from a traditional chemical company to a specialty chemicals manufacturer.

Lanxess polyurethanes' polyurethane business unit operates five production sites worldwide and has specialized application laboratories in the United States, Europe and China, focusing on providing customers with personalized solutions and services. With the completion of the transaction, UBE will assume full ownership of all production facilities, research and development facilities and approximately 400 employees of LANXess's polyurethane business. In the last 12 months (ending June 2024), LANXess polyurethanes generated sales of approximately EUR 250 million, underlining the strong competitiveness and profitability of its market.

Lanxess plans to use the proceeds from the transaction to further optimize the company's financial structure and reduce its net debt level. The transaction is expected to reduce LANXess's leverage ratio (i.e. the ratio of net debt to EBITDA) by approximately 0.5 times, significantly enhancing the company's financial soundness and flexibility, and laying a solid foundation for future sustainable development.

Matthias Zachert, Chairman of Lanxess's Board of Management, said: "The sale of the polyurethane business is another important milestone in our transformation into a specialty chemicals company. We firmly believe that under the leadership of UBE Corporation, the business will embrace broader development opportunities and growth potential. At the same time, we will effectively use the proceeds of this transaction to further optimize our financial structure, strengthen the health of our balance sheet and create greater value for our shareholders."

The deal is subject to regulatory approval. Lanxess expects the transaction to be completed in the first half of 2025, at which time the company will fully focus on the development of its specialty chemicals business and continue to demonstrate its expertise and innovation in the global market.