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Mergers & Acquisitions

Indorama snags Huntsman intermediates and surfactants businesses

Acquisition advances polyester expert’s diversification ambitions

by Marc S. Reisch
August 8, 2019 | A version of this story appeared in Volume 97, Issue 32


A photo of a hand covered in bubbles.
Credit: Shutterstock
Indorama's purchase of Huntsman assets will put it in the surfactants business.

In an effort to diversify beyond its core polyester business, the acquisitive Thai chemical maker Indorama Ventures has struck its largest deal yet: the purchase of Huntsman Corp.’s chemical intermediates and surfactants businesses for $2.1 billion.

Indorama says the acquisition advances its goal to be a global, diversified chemical company. Huntsman says the deal will allow it to focus on businesses such as polyurethanes and advanced materials. Pending regulatory approvals, the sale should close by the end of the year.

The acquisition will bolster Indorama’s US footprint with the addition of facilities in Texas in Chocolate Bayou, Dayton, and Port Neches. The Port Neches site includes an ethylene cracker that complements a cracker in Lake Charles, Louisiana, that Indorama purchased in 2015. The deal also includes surfactant facilities in India and Australia. Overall, it adds about $1.7 billion to Indorama’s $11.4 billion in annual sales.

Besides strengthening Indorama’s polyester feedstock chain, the acquisition will put the Thai firm into new products, points out Wood Mackenzie research analyst Andrew Day. They include propylene and propylene oxide derivatives, surfactants, ethanolamines, and methyl tert-butyl ether, Day says.

Huntsman CEO Peter Huntsman says cash from the sale will increase his firm’s ability to expand its remaining businesses. But on a conference call with investors, Huntsman said, “We are not feeling compelled to go out and buy something just because we have the cash.” If the world is heading into recession in the next few quarters, he added, it might be better to preserve capital for the time being.



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