US chemical manufacturing company Huntsman has agreed to divest its chemical intermediates businesses, which includes PO/MTBE, and its surfactants businesses to Thai petrochemicals producer Indorama Ventures for $2.076 billion.

The deal is expected to help Huntsman to focus on its growing polyurethanes operations while enabling Indorama Ventures to increase its US footprint.

As part of the deal, the Thai chemical company will acquire Huntsman’s production plants situated in Port Neches, Texas; Dayton, Texas; Chocolate Bayou, Texas, US; Ankleshwar, India; and Botany, Australia.

The acquisition is expected to strengthen Indorama Ventures’ Integrated Oxides (EOs) and Specialty Chemical segment’s growth trajectory and includes EODs and Propylene Oxide Derivatives.

Furthermore, Indorama Ventures will expand its expertise of operating Integrated Oxides facilities in the US Gulf Coast (USGC).

The transaction consideration includes cash purchase price of $2.0 billion plus the transfer of up to approximately $76 million in net underfunded pension and other post-employment benefit liabilities.

Peter Huntsman – Chairman, President and CEO of Huntsman said: “This is another milestone in our stated strategy to focus more on our downstream and specialty businesses where we will generate more stable margins and consistent, strong free cash flow.

“We are committed to retaining our strong investment grade balance sheet, repurchasing our shares, investing in organic research and select capacity expansions and acquiring strategic assets that are accretive to our earnings and create shareholder value.

“Huntsman intends to accelerate share repurchases under its existing $1 billion multi-year authorization after the close of this transaction.”

The transaction will be funded by internal cash flows and debt financing and does not necessitate equity dilution, according to Indorama Ventures.

Aloke Lohia – Indorama Ventures Group CEO said: “This acquisition is a momentous propellant in our journey towards our stated goal of being a global, diversified chemicals company with multiple, and related earnings streams.”

Subject to regulatory approvals and other customary closing conditions, the transaction is expected to close by Q4 2019.

  Aloke Lohia, Huntsman, Indorama Ventures, Peter Huntsman, Thailand, USA