MOSCOW (MRC) -- Following the approval of all relevant antitrust authorities, the new synthetic rubber joint venture of Lanxess and Saudi Aramco will start life on April 1 under the name Arlanxeo, said Lanxess on its site.
The future partners said the name and logo combine elements from both, with the descriptor Performance Elastomers highlighting the product range – Lanxess’ rubber business was formerly part of its business unit Performance Polymers.
Managed by a holding in the Netherlands, the jv will be the world’s largest producer of synthetic rubber with annual sales of EUR3 billion and an enterprise value of EUR2.75 billion. Its activities will include development, production, marketing, sale and distribution of synthetic rubber for tire industry, automotive parts and other applications.
As MRC informed earlier, Lanxess clinched the deal with Saudi Aramco Overseas Company, a subsidiary of the Saudi Arabian oil giant, in September 2015. Under the agreement, the Saudi partner is paying its German counterpart around EUR1.2 billion in cash for the 50% stake after deduction of debt and other financial liabilities.
Lanxess CEO Matthias Zachert said earlier his company would invest about quarter of the proceeds in its Advanced Intermediates and Performance Chemicals businesses, with the remainder going toward paying down debt and buying back shares.
The final management team is to be announced in the near future. The companies announced earlier that CEO will be appointed by Lanxess, the CFO by Saudi Aramco. Zachert will head the board of directors, on which the partners will be equally represented.
"With this joint venture of the world’s largest producer of synthetic rubber and the world’s largest integrated energy company, we have laid the foundations for the sustainable and positive development of Arlanxeo," said Zachert.
In September 2015, Lanxess was in talks to put its main synthetic rubber business into a joint venture with petrochemicals group Ineos. Lanxess also held talks with Saudi Arabian Oil Company (Saudi Aramco) and Russia's NKNK and Sibur.
Lanxess is a leading specialty chemicals company with sales of EUR 8.0 billion in 2014 and about 16,600 employees in 29 countries. The company is currently represented at 52 production sites worldwide. The core business of Lanxess is the development, manufacturing and marketing of plastics, rubber, intermediates and specialty chemicals.
Saudi Aramco, officially the Saudi Arabian Oil Company, is a Saudi Arabian national oil and natural gas company based in Dhahran, Saudi Arabia. Saudi Aramco's value has been estimated at up to USD10 trillion in the Financial Times, making it the world's most valuable company. Saudi Aramco has both the largest proven crude oil reserves, at more than 260 billion barrels, and largest daily oil production.
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