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Business

Celanese Regroups

Oxo chemicals unit will be sold to private equity firm

by Alexander H. Tullo
December 18, 2006 | A version of this story appeared in Volume 84, Issue 51

Celanese has agreed to sell its oxo products business, including its European Oxo joint venture with Degussa, to private equity firm Advent International for $630 million.

The oxo business includes alcohols, polyols, and esters for applications such as solvents, inks, lubricants, and plasticizers. It runs plants in Bay City and Bishop, Texas, and Oberhausen, Germany. It generates about $720 million in annual sales and employs 1,100.

Degussa's 50% stake in European Oxo is also included in the transaction. European Oxo, formed in 2003 through the merger of the propylene-based oxo chemicals assets of Degussa and Celanese, has about $700 million in annual sales and facilities in Oberhausen and Marl, Germany.

Celanese says the business is no longer a core focus. "This sale allows us to continue our strategic execution to focus our portfolio and position Celanese for strong, sustainable earnings growth and increased value," says CEO David Weidman.

Celanese announced the sale last week at a meeting with financial analysts, where the firm also said it is realigning its structure into three groups. It is forming an advanced engineered materials group consisting of its Ticona technical polymers affiliate and interests in engineering polymer joint ventures. A consumer and industrial specialties group will include acetate products, emulsions, and polyvinyl alcohol. And an acetyl intermediates group will house major Celanese businesses such as acetic acid and vinyl acetate.

For its part, Advent intends to streamline the oxo business and focus it on higher value derivatives. "The market for oxo chemicals and derivatives has improved over the last few years and offers further growth potential and consolidation opportunities," says Ronald Ayles, an Advent executive.

Advent is also in the process of purchasing Bayer's H. C. Starck metal and ceramic powders unit. It already owns the European polyvinyl chloride business Vinnolit.

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