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Mergers & Acquisitions

Hexion’s epoxy unit is going to Westlake Chemical

Westlake gets to diversify, while Hexion continues to slim down

by Alexander H. Tullo
December 1, 2021 | A version of this story appeared in Volume 99, Issue 44


A photo of a windmill blade.
Credit: Shuttterstock
Hexion calls itself is the largest producer of epoxies for windmill blades.

Hexion Holdings has agreed to sell its epoxy resins business to Westlake Chemical for $1.2 billion. The deal adds a twist to Hexion’s plan to split into two while bringing more specialty chemicals to Westlake’s portfolio.

Hexion’s epoxy business has annual sales of $1.5 billion of liquid epoxy resins and raw materials such as epichlorohydrin and bisphenol A. The business includes specialty epoxies used in adhesives, coatings, and composites. It boasts of being the world’s largest producer of epoxy binders for windmill blades.

In September, Hexion announced a plan to split in two. A new firm, comprised of its adhesives and Versatic acids and derivatives business, would keep the Hexion name and have an initial public offering (IPO) on the New York Stock Exchange. That business had 2020 sales of $1.4 billion. At the time, Hexion said shares in the epoxy business would be distributed to current shareholders. The firm says it is still considering the IPO.

Hexion took a preliminary slimming step in May, selling its phenolic resins business to the private equity firms Black Diamond and Investindustrial for $425 million.

For Westlake, the deal is a step in a new direction. The company had 2020 sales of $7.5 billion, nearly 80% of which came from chlor-alkali, polyvinyl chloride, and related products. Building out this business, in October Westlake purchased Boral’s North American building products unit—which makes products like siding, shutters, and windows—for $2.2 billion. The balance of Westlake’s business is in polyolefins and styrene.

Westlake says the Hexion deal will help it penetrate sustainable, high-growth markets. “Light-weighting is a critical feature for the manufacture of structural components for automobiles and for renewable energy, particularly the composite blades used by wind turbines, and epoxies are key ingredients in these sustainable products,” Westlake CEO Albert Chao said in announcing the purchase.

The purchase is also a downstream integration for Westlake, as epichlorohydrin is a chlorine derivative. Westlake already has a business in chlorinated chemicals such as the solvents perchloroethylene and trichloroethylene.



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