German group Lanxess has agreed to sell a 50 per cent stake in its synthetic rubber business to Saudi Aramco
Under the deal, the two companies will set up a joint venture which is valued at about US$3.08bn. Saudi Aramco will pay about US$1.35bn in cash for the stake, after adjustments for debt and payables. Operational control of the JV will be assumed by Lanxess, according to a statement by Lanxess.
Matthias Zachert, CEO of Lanxess, had said earlier that the group could partner with a supplier of butadiene, the main petrochemical raw material for synthetic rubber, so that the group exposure to swings in that market could be minimised.
The search for a strategic partner for the German group’s synthetic rubber business began more than a year ago as the company tried to combat oversupply in the industry. Reuters quoted sources as saying that the group also held talks with European petrochemicals group Ineos, and Russia’s NKNK and Sibur.
Lanxess has the world’s largest synthetic rubber business, with about US$3.375bn in sales.
