Hexion Holdings to Sell Epoxy Businesses to Westlake
Concluding its ongoing strategic review, Hexion Holdings has agreed to sell its epoxy-based Coatings and Composite businesses to Westlake Chemical for about $1.2 billion. The deal is expected to close in the 2022 second half, following all approvals. The activities to be divested include the epoxy specialty resins and base epoxy resins and intermediates product lines.
The business generated sales of around $1.5 billion in fiscal 2021 (30 September). In the transaction, some 1,300 employees and eight global production facilities for epoxy-based coatings and composite products used by end-markets such as wind energy, non-residential construction, industrial, electrical, automotive and aerospace will transfer to the new owner.
Hexion, which recently split into two separate companies to facilitate the epoxies sale, said it wants to use the proceeds to further pay down debt and invest in its adhesives and versatic acids and derivatives product lines, which will become its sole focus.
After the final divestment of a business line, the chemical producer said it will continue to build on its strong momentum, driven primarily by strong new residential construction and remodeling demand in North America. It also hopes to benefit from the expansion of capacities and gains from innovative new products, as well as demand for more sustainable building and coatings materials.
The company said its management team and board “will continue to evaluate strategic value creation options for its adhesives and versatic acid product lines, including a proposed initial public offering on the New York Stock Exchange. Chairman, president and CEO Craig Rogerson said management believes that, with Westlake as its new owner, the epoxy business will be well positioned.
Author: Dede Williams, Freelance Journalist
