Irving-based chemicals company Celanese Corp. is selling its minority stake in a Japanese joint venture for $1.575 billion.
Celanese announced the deal before trading markets opened Monday. It said it’ll use some of the cash to begin a $500 million share buyback program.
The company sold its 45% investment in Polyplastics to Japanese chemicals company Daicel Corp. and expects the deal to close later this year after regulatory approvals. Celanese and Daicel had jointly operated the polymers maker since 1964 — the oldest joint venture for the North Texas-based company.
“We plan to use this opportunity to monetize a historically passive investment and allocate significant capital to higher growth businesses within Celanese,” Celanese CEO Lori Ryerkerk said in a statement.
Celanese said its engineered-materials presence in Asia is “significantly greater now” than when it made the Polyplastics investment more than 50 years ago. It expects to compete with Daicel in markets where product lines overlap and plans to expand its manufacturing capacity in Asia.
“We will continue to invest in product expansion to serve the growing demand in applications such as 5G, advanced mobility, medical/pharma, and sustainable materials,” said Tom Kelly, Celanese’s senior vice president of engineered materials.
Celanese said it expects to net $1.3 billion from the deal after taxes. Besides the stock buyback, it told investors it’ll use the other $800 million for possible acquisitions or future share repurchases.
