Celanese Announces Acetate Tow JV with Blackstone; We’re Skeptical of Long-Term Value Creation
Narrow-moat Celanese announced plans to spin off its acetate tow business into a joint venture with Blackstone, which will contribute its recently acquired Rhodia Acetow business. Celanese will own 70% of the JV and would receive a $1.6 billion dividend payout as part of a recapitalization upon deal completion. We raise our fair value estimate to $63 per share from $62 based on the incremental cash flows from synergies and a 50% probability that the deal will close as planned.This deal consists...
Celanese is a holding company. Through its subsidiaries, the company is a chemical and specialty materials company. The company is a producer of engineered polymers and a producer of acetyl products, which are intermediate chemicals. The company's segments are: Engineered Materials, which develops, produces and supplies a portfolio of specialty polymers for automotive and medical applications, as well as industrial products and consumer electronics; Acetate Tow, which is a producer and supplier of acetate tow and acetate flake, primarily used in filter products applications; and Acetyl Chain, which includes the chain of intermediate chemistry, emulsion polymers and ethylene vinyl acetate polymers businesses.
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