LyondellBasell buying A. Schulman for $2.25 billion
The purchase doubles the size of LyondellBasell's existing compounding business and creates a business with combined revenue of $4.6 billion.
Chemicals maker LyondellBasell Industries is buying rival A. Schulman Inc. for US$2.25 billion, doubling the size of its business that supplies plastic compounds to the packaging, electronics, and building markets.
The deal creates a compounding business with combined revenue of US$4.6 billion over the last 12 months, and boosts LyondellBasell’s exposure to the agricultural sector, which has been the focus of a large number of deals among chemicals makers. LyondellBasell’s plastic compounding business largely caters to the automobile parts market; auto-end markets currently account for about 90 per cent of LyondellBasell’s plastic compounding revenue and that will drop to just over 50 per cent after the deal closes.
“The acquisition of Schulman is a natural extension of our current platform,” LyondellBasell CEO Bob Patel said in a statement. “This combination will allow us to provide our customers with a wider range of innovative solutions while adding the ability to serve high-growth end markets beyond the automotive sector.”
“This transaction, which provides our shareholders with a compelling, immediate cash premium, represents the culmination of a robust assessment of strategic alternatives undertaken by our Board of Directors,” Schulman chairman, president, and CEO Joseph Gingo added in the statement.
The deal is expected to close in the second half of 2018.
LyondellBasell has headquarters in Houston and London.
Fairlawn, Ohio-based Schulman is a major compounder and concentrates maker in North America and Europe, and also operates as a resin distributor in Europe. The company employs approximately 5,000 workers at 54 locations worldwide.