Celanese, Blackstone Ink Deal to Form Acetate Tow JV

Chemical maker, Celanese CE and funds managed by leading investment firm, Blackstone BX have agreed to form a joint venture (“JV”) that will create a global acetate tow supplier. Celanese will own 70% of the JV with Blackstone owning the remaining 30%.

Under the deal terms, Celanese will contribute its Cellulose Derivatives unit including its equity interest in existing JVs with China National Tobacco Corporation while Blackstone will contribute its Rhodia Acetow unit that it recently purchased from Solvay.

The creation of the JV is subject to regulatory clearances and customary closing conditions that will determine the timing of its completion. Upon its completion, the JV will be governed by a board consisting of three directors appointed by Celanese and two by Blackstone.

The JV will have an expanded global production footprint including eight fully-owned manufacturing plants and three existing JV sites. The new company, which is expected to generate 2017 annual pro forma revenues of around $1.3 billion, will be well placed to more efficiently address customers’ needs and offer the highest level of quality and services. The integration of technology and complementary tow assets will also result in synergies, primarily from optimization of supply chain networks and procurement of raw materials, energy, equipment and other services.

The companies also noted that commitments for $2.2 billion of debt have been received by the partners on behalf of the JV, which is expected to be supported by cash generated at the new company. Celanese will receive an initial dividend of roughly $1.6 billion following the formation of the JV, which the company is expected to deploy on investment in organic growth, acquisitions, share buybacks and debt reduction, among others.

Celanese, earlier this month, provided an update on its Ibn Sina JV and the construction of a 50,000-metric ton polyacetal manufacturing plant in Jubail Industrial City,…

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