COLOGNE, Germany—Lanxess A.G. and Saudi Arabian Oil Co. have unveiled the executive team of their Arlanxeo joint venture, set to begin operations April 1.
Lanxess confirmed during its March 17 financial presentation for 2015 that the relevant antitrust authorities have cleared the transaction earlier than expected. The venture will be headquartered in Maastricht, Netherlands.
Once Arlanxeo begins operations, the firm's Performance Polymers segment will be replaced with the High Performance Materials business unit and the 50/50 joint venture, which consists of Lanxess' Tire & Specialty Rubbers and High Performance Elastomers business units. The firm's other two segments, Advanced Intermediates and Performance Chemicals, will remain unchanged.
Arlanxeo is valued at about $3.1 billion. Lanxess received about $1.3 billion from Aramco for its 50 percent stake in the company. Lanxess said it plans to invest about $452 million of the proceeds toward organic growth.
The German-based specialty chemicals company described 2015 as a success, despite a challenging market environment. Net income increased to about $186.7 million, up from $53.2 million in 2014. Sales experienced a slight decline to $8.94 billion, from $9.05 billion in 2014.
“Fiscal 2015 was successful for Lanxess in every respect,” CEO Matthias Zachert said in a statement. “We implemented our realignment faster than planned and, at the same time, significantly improved our profit situation and financial position. We have thus laid a stable foundation for our growth course.”
Arlanxeo represents the third and final phase of Lanxess' realignment program “Let's Lanxess Again.” The first, completed in 2015, resulted in the reduction of 1,000 jobs worldwide and the consolidation to 10 business units from 14.
During the firm's third quarter presentation in 2015, Zachert said Lanxess was accelerating the second phase—optimization of its global plant network. The group anticipates additional savings of about $163 million progressively over the coming years until fully realized by 2019. A global analysis of its plants and process will extend into 2016.
The firm provided no update on the second phase during its recent financials presentation. Lanxess is adjusting capacity of EPDM and neodymium-based performance butadiene rubber production network into four strategic regional facilities in Europe, North America, Latin America and Asia-Pacific.