Tokyo – The sale of Lanxess Urethane Systems to Japanese chemicals company Ube Corporation has completed, after all relevant antitrust authorities granted approvals for the sale. The company’s plans to offload the business emerged back in November 2023, and the sale to Ube was announced in October 2024.
The German company received gross cash proceeds of about €500m for the transaction, with the enterprise value of the business amounting to €460m. It plans to use the proceeds to redeem a €500m benchmark bond that matures in May 2025, reducing the company’s debt-to-EBITDA leverage ratio to about 3x.
“With this sale, we conclude our portfolio transformation and at the same time achieve a substantial further reduction of net financial debt,” said chairman Matthias Zachert.
Lanxess acquired the urethane systems portfolio with its $2.1bn purchase of US specialty chemicals business Chemtura in 2017. It includes hot-cast prepolymers, aqueous urethane dispersions and polyester polyols.
However, the PU business was something of an outlier in the Lanxess portfolio. The company had been formed back in 2004 when Bayer spun out its chemicals business. Bayer retained most of its polymers operations as Bayer MaterialScience, including polyurethanes. It was subsequently spun out to form Covestro.
The flame retardant business remains with Lanxess. This includes the brominated FRs portfolio acquired with Chemtura. These have applications in products such as insulation.
