Trinseo Sells Synthetic Rubber to Synthos
US plastics and rubber producer Trinseo has sold its synthetic rubber business based in Schkopau, Germany, to Poland’s Synthos for $491 million. The deal includes $449 million in cash and about $42 million in assumed pension liabilities. Synthos is hoping to conclude its acquisition toward the end of 2021, although Trinseo is expecting completion in 2022.
Trinseo announced last December that it was exploring a possible sale of the business, part of the East German assets acquired by Dow Chemical, to which it once belonged, in the 1990s. President and CEO Frank Bozich said at the time there were other parties who could better capitalize on the market’s significant growth opportunities.
“Following the acquisition of Arkema’s PMMA business, the divestiture of synthetic rubber provides Trinseo with a stronger balance sheet and greater flexibility to pursue organic and acquisition growth opportunities,“ Bozich said. Arkema closed the sale of its PMMA business to Trinseo earlier this month.
“In pursuing our transformation strategy toward becoming a higher margin and less cyclical specialty materials and sustainable solutions provider, we believe our best path is to focus on growth in Engineered Materials and CASE (coatings, adhesives, sealants and elastomers) applications,” the CEO added.
The Polish chemicals and synthetic rubber company said the takeover of Trinseo’s operations, including the manufacturing and R&D facilities, allows it to access new higher-margin markets, expand its geographic footprint, including in Asia, and leverage on significant synergies.
“We believe that the synthetic rubber business brings a range of technologically advanced SSBRs (solution styrene-butadiene rubber), including functionalized grades used for high-performance tires such as low roll resistance types and grades for electric vehicles,” said Synthos CEO Zbignew Warmuz. “This acquisition fits into our strategy of continuous product portfolio expansion, which will allow us to satisfy the complete needs of the customer, which is a critical factor for success in the global synthetic rubber market.”
Warmuz said Synthos’ management estimates that the business to be acquired will contribute at least €50-60 million of EBITDA annually. In addition, the company is anticipating annualized acquisition-related synergies of more than €20 million.
Author: Elaine Burridge, Freelance Journalist
