LANXESS to Sell Urethane Systems to UBE Corporation
- The sale of Urethane Systems is valued at €460 million with expected proceeds of €500 million.
- The business includes 5 manufacturing sites and 400 employees.
- Proceeds will reduce LANXESS's net debt, lowering leverage ratio by ~0.5x.
- Transaction expected to close in H1 2025, pending regulatory approval.
Transaction Overview
LANXESS has signed a contract to sell its Urethane Systems business to UBE Corporation for an enterprise value of €460 million, with expected proceeds of around €500 million. This sale marks LANXESS's exit from its last remaining polymer business.
Business Scope
The Urethane Systems business includes five manufacturing sites worldwide and application laboratories in the USA, Europe, and China. Approximately 400 employees will be transferred to UBE Corporation as part of the transaction. The business generated sales of around €250 million in the last twelve months as of June 2024.
Financial Impact
LANXESS plans to use the proceeds from the sale to reduce its net debt, which will likely decrease the leverage ratio (net debt / EBITDA pre) by approximately 0.5x. This move is part of LANXESS's strategy to strengthen its balance sheet.
Regulatory Approval and Timeline
The transaction is subject to approval by relevant authorities. LANXESS anticipates that the deal will close in the first half of 2025.