LANXESS and UBE finalise €460 million agreement for urethane systems

LANXESS, a leading manufacturer of speciality chemicals, has announced the sale of its Urethane Systems division to Japan’s UBE Corporation for €460 million.

LANXESS, a speciality chemicals manufacturer, has agreed to sell its Urethane Systems business to Japanese UBE Corporation. The enterprise value is €460 million, with estimated roughly €500 million proceeds. With this transaction, LANXESS departs its sole remaining polymer business.

The Urethane Systems company has five manufacturing facilities worldwide and application laboratories in the United States, Europe, and China. UBE Corporation will take over all operations from LANXESS, which has approximately 400 people. The company generated approximately €250 million in sales during the fiscal year ending June 2024.

LANXESS intends to use the money to lower its net debt. The leverage ratio (net debt / EBITDA pre) will likely decrease by ~0.5x.

“The sale of Urethane Systems marks another milestone in our fast transformation into a pure-play specialty chemicals company, as we are divesting the last remaining polymer business in our portfolio. We are convinced that the Urethanes business will have significantly enhanced opportunities for growth and development under the umbrella of UBE,” says Matthias Zachert, Chairman of the Board of Management of LANXESS AG. ”At the same time, we are using the proceeds from the transaction to strengthen our balance sheet by further reducing our net debt.”

The deal remains subject to clearance by the appropriate authorities. LANXESS expects the acquisition to completion in the first half of 2025.