LANXESS to Move Out of Joint Venture
LANXESS and Saudi Aramco formed a joint venture company Arlanxeo in 2016. The firm is one of the leading firm in synthetic rubber manufacturing and is headquartered in Netherlands. Arlanxeo is valued at €3 billion.
LANXESS who was a part of this major joint venture is selling its 50% stake to its it’s partner in the joint venture i.e., Saudi Aramco. This proposal is waiting for the approval of antitrust authorities and is expected to be completed by end of 2018.
LANXESS is expected to receive €1.4 billion by its 50% of stake after considering debts and financial liabilities. The major strategy for moving out is part of financial health improvement strategy via reducing debt. As per their annual report, they had €2.42 billion in non-current financial liabilities.
LANXESS acquired Chemtura, its US rival for €2.4 billion in 2016. LANXESS covered its funds by entering a joint venture with Saudi Aramco and selling 50% stake of synthetic rubber business in 2016.
About LANXESS: It is one of leading speciality chemical company founded in 2004, headquartered in Germany. It has around 74 production sites worldwide. Its specialities are high performance materials, Advanced Industrial Intermediates, Liquid Purification Technologies, Inorganic pigments, Leather chemicals, Functional chemicals, and Material production products.
About Saudi Aramco: It is a Saudi Arabian national petroleum and natural gas company based in Dhahran, Saudi Arabia. It is considered as one of the largest company by revenue and also has one of the largest daily oil production. It also has largest crude oil reserves. Aramco was formerly known as Arabian- American Oil Company.
Arlanxeo: It came into existence with a joint venture between LANXESS and Saudi Aramco in 2016. It is considered to be one of the leading synthetic rubber company with about 20 production sites in nine countries. It is headquartered in Netherlands.
– Vasundhra Singh,
Assistant Research Executive,