September 30, 2022

Unitranche

Supportive Business Potential

DuPont to sell majority of M&M for $11B

DBT PHOTO BY JACOB OWENS

WILMINGTON – Four months after announcing that it would investigate divesting its Mobility & Materials (M&M) segment, which includes products in its engineering polymers and performance resins lines, DuPont has reached an $11 billion sale for the majority of the segment, the company announced Friday morning.

More than 80% of the segment will be sold to Texas-based chemical and specialty materials company Celanese Corp., a publicly traded company with a market cap of more than $16 billion.

The sale agreement with Celanese includes the entire Engineering Polymers business line and select product lines within the Performance Resins and Advanced, which combined generated net sales of approximately $3.5 billion and operating EBITDA of about $800 million last year.

Celanese will fund the all-cash sale through committed financing, with an expected closing around the end of 2022, subject to closing conditions and regulatory approvals.

“The transaction with Celanese that we are announcing today will create a market-leading portfolio serving the automotive, consumer and industrial markets with unmatched scale, manufacturing capability and technical expertise,” said Ed Breen, executive chairman and CEO of DuPont, in a statement. “We are proud of the strength of these industry-leading businesses, which we believe will be even stronger when combined with the highly complementary portfolio of Celanese. We are excited for Celanese to partner with the team and we are confident that together they will continue to drive industry-defining material science innovation to serve customers and the value chain.”

The net proceeds from the divested M&M businesses will help fund the previously announced $5.2 billion acquisition of Rogers Corp. and further M&A opportunities, in addition to continuing share repurchases, DuPont announced.

Breen is best known for overseeing DuPont’s brief merger with Dow and its subsequent split of its divisions oversaw the divestment of the company’s Nutrition & Biosciences segment and its clean technology business in the past two years. He also engineered the acquisition of Laird Performance Materials in March.

He said in November that DuPont sought to focus on “high-growth, high-value opportunities in sectors with steady long-term secular growth trends where our global innovation leadership enables a competitive advantage,” with a portfolio centered on electronics, water, protection, industrial technologies and next generation automotive.

It may mean that the company once best known for gunpowder, nylon, Teflon and Lycra over differing generations may one day be known for electric vehicles, 5G telecommunications and clean energy.

In addition to the sale to Celanese, DuPont announced Friday that it aims to divest its Delrin business, which was included in DuPont’s scope of the strategic review. That product generated net sales of approximately $550 million and operating EBITDA of approximately $180 million in 2021. The company is targeting a closing date for the sale of Delrin in the first quarter of 2023.

DuPont will retain its Auto Adhesives, Multibase and Tedlar product lines following the Celanese sale, which combined generated net sales of approximately $950 million and operating EBITDA of approximately $120 million in 2021.

News of the sale caused DuPont’s share price to rise about 1% Friday morning while Celanese’s had dropped about 2%.