TOKYO—Japan's energy group Eneos Corp. has agreed to acquire JSR Corp.'s elastomers business, which includes the manufacturing and sales of synthetic rubber.
As part of the agreement, signed May 11, JSR will establish a new company and will transfer the elastomers business and the shares of subsidiaries and affiliates related to this business to the new company.
Eneos then is expected to acquire all the shares of the new company and make it a wholly owned subsidiary on April 1, 2022.
The two parties have agreed on an enterprise value of $1.06 billion for the business, which posted an operating loss of $105 million, on 20 percent lower sales of $1.3 billion for the fiscal year ended March 31.
JSR has been carrying out structural reforms within the elastomers business, including cost reductions such as rationalization of raw materials and distribution costs.
Eneos said its acquisition is based on the expected completion of $55 million in cost-cutting measures.
JSR's elastomers business contributed about 21 percent of total group sales in fiscal year 2020 and includes a portfolio of styrene-butadiene rubbers (ESBR and SSBR), polybutadiene rubber, polyisoprene, nitrile rubber, butyl rubber, ethylene-propylene rubber and thermoplastics elastomers.
Eneos said a key reason behind the acquisition was the company's SSBR materials, which it said are "indispensable to the mobility industry."
"Eneos expects tires to be needed regardless of changes in (vehicle) power sources and forms, and elastomers business is a field where growth can be expected in the future," the Eneos statement said.
The acquisition is part of Eneos' 2040 long-term vision, which sees the group focusing on high-performance materials as a growth area.
"By acquiring technology in new core areas for our materials business, Eneos will be able to provide high-performance materials that support various industries including the mobility industry," it said.
Formerly JXTG Nippon Oil & Energy Corp., Eneos is based in Tokyo and is a leading Japanese petroleum company.