Celanese has reached an agreement with ExxonMobil Chemical to acquire the latter’s thermoplastic vulcanizate (TPV) business. Previously, Celanese had gained a foothold in the TPV sector through the acquisition of seventh-ranked supplier SO.F.TER. Group of Italy in 2016. The current deal includes the Santoprene brand along with intellectual property, production and commercial assets, and a world-class organization.

TPVs are used in a variety of end markets, including automotive, construction, appliance, medical, and industrial. Dynamically vulcanized elastomers are similar in terms of elastomeric properties to EPDM thermoset rubber but can be molded as thermoplastics using injection molding, blow molding, and profile extrusion processes. Common applications include glass run channel weather seals and building glazing components. In the auto sector in general, Celanese forecast an increase in per-vehicle usage of TPVs from 2 kg in 2015 to 3 to 4 kg by 2040.

“With the acquisition of the Santoprene business, we are further expanding the unrivaled portfolio of engineered solutions we bring to our customers,” said Lori Ryerkerk, Chairman and CEO. “This transaction represents a high-return opportunity to drive future shareholder value by deploying our excess cash from the monetization of our passive ownership in Polyplastics [sold for $1.575 billion this year] and continued strong cash generation in our businesses. We are eager to welcome the Santoprene team to Celanese and look forward to their contributions to our continued growth in Engineered Materials.

“This transaction substantially strengthens our existing elastomers portfolio, allowing us to bring a wider range of functionalized solutions into targeted growth areas, including future mobility, medical, and sustainability,” said Tom Kelly, Senior Vice President, Engineered Materials. “The reputation of the Santoprene brand in TPV is consistent with Engineered Materials’ flagship brands, including Hostaform in POM and GUR in UHMWPE. With this product as part of the Engineered Materials portfolio and project pipeline model, we are confident that our joint commercial and technical teams across the globe will generate meaningful shareholder value.”

“Reaching this agreement with Celanese is consistent with our strategy and allows us to focus on serving the growing market for primary olefin derivatives, where we can leverage our competitive advantages of industry-leading scale, integration, and proprietary technology,” said Jack Williams, Senior Vice President of Exxon Mobil Corp. Recently, ExxonMobil Chemical has been actively promoting and developing new polypropylene grades, as well as new additions to its portfolio of Vistamaxx polyolefin plastomers (POPs), among other initiatives.

Celanese will acquire the Santoprene business from ExxonMobil for a total purchase price of $1.15 billion on a cash-free, debt-free basis. As part of the transaction, Celanese will acquire the following: