Celanese and Blackstone to form acetate tow JV
Specialty materials company Celanese has signed a definitive agreement with investment firm Blackstone to form a joint venture (JV) to create a global acetate tow supplier.
Celanese will own 70% of the JV company, while Blackstone will own the remaining 30% stake.
Under the agreement, Celanese has agreed to contribute its cellulose derivatives business unit and its equity interest in existing JVs with China National Tobacco to the new company.
Blackstone will provide its recently acquired Rhodia Acetow business unit, acquired from Solvay recently. With approximately 2,400 employees, the new company is expected to generate 2017 annual pro forma revenue of nearly $1.3bn.
The JV will have eight wholly owned manufacturing facilities along with three existing JV sites.
Celanese chairman and CEO Mark Rohr said: "The combination of these tow assets will enhance our ability to serve customers more efficiently and reliably from a global production footprint, while also creating growth opportunities for employees.
"This transaction gives us the opportunity to partially monetise Cellulose Derivatives and reallocate significant capital to higher growth businesses within Celanese to accelerate our growth momentum."
After closing of the transaction, the JV will be operated by a board of directors comprising three Celanese appointed directors and two Blackstone appointed directors. The name of the new company along with its management team will be decided later.
Both companies will receive a mainly non-recourse debt of $2.2bn on behalf of the JV.
After the formation of the new company, an initial dividend of approximately $1.6bn will be distributed to Celanese.
The agreement is subject to regulatory approvals and customary closing conditions.
Until the deal closes, Celanese’s Cellulose Derivatives and Blackstone’s Rhodia Acetow will continue to operate separately.