The divestment of Urethane Systems is part of LANXESS’s broader strategy to streamline its portfolio and focus on high-margin specialty chemicals businesses, LANXESS said.
03 Apr 2025 | 1076 Views | By Arunima Pal
Specialty chemicals company LANXESS has finalized the sale of its Urethane Systems business to Japan-based UBE Corporation. The transaction, initially announced in October 2024, was completed on April 1, 2025, after receiving approvals from all relevant antitrust authorities.
LANXESS secured gross cash proceeds of approximately €500 million, with the ...
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Specialty chemicals company LANXESS has finalized the sale of its Urethane Systems business to Japan-based UBE Corporation. The transaction, initially announced in October 2024, was completed on April 1, 2025, after receiving approvals from all relevant antitrust authorities.
LANXESS secured gross cash proceeds of approximately €500 million, with the enterprise value of the deal amounting to €460 million. The German chemical manufacturer plans to utilize these proceeds to redeem a €500 million benchmark bond set to mature in May 2025. The move is expected to reduce LANXESS’s leverage ratio (net financial debt to EBITDA pre) to approximately 3x.
“With this sale, we conclude our portfolio transformation and at the same time achieve a substantial further reduction of net financial debt,” said Matthias Zachert, Chairman of the Board of Management of LANXESS AG.
The divestment of Urethane Systems is part of LANXESS’s broader strategy to streamline its portfolio and focus on high-margin specialty chemicals businesses, LANXESS said. In recent years, the company has undertaken several divestitures and acquisitions to reposition itself within the global chemicals market.
LANXESS’s Urethane Systems business specialized in polyurethane prepolymers, catalysts, and specialty additives, catering to industries such as automotive, construction, and electronics. The unit’s sale aligns with LANXESS’s strategy of exiting non-core businesses while strengthening its financial position.
UBE Corporation, listed on the Tokyo Stock Exchange, is a global chemical manufacturer with a strong presence in polyurethane, nylon, cement, and battery materials.
This transaction marks another significant milestone in the ongoing consolidation within the specialty chemicals sector, as companies seek to optimize their portfolios and focus on core growth areas.
The specialty chemicals industry has been undergoing significant consolidation as companies seek to streamline their operations, enhance profitability, and focus on high-growth segments. This shift is driven by increasing global competition, evolving customer demands, and the need for innovation in areas such as sustainable materials, electric mobility, and high-performance polymers. By selling non-core businesses and acquiring specialized ones, companies are positioning themselves to remain competitive in a rapidly changing market.
One of the key drivers of this trend is portfolio optimization. Large chemical firms are reassessing their business divisions and divesting units that no longer align with their strategic goals. LANXESS, for instance, has been restructuring its portfolio in recent years, moving away from businesses that do not contribute to its long-term vision. The sale of its Urethane Systems business to UBE Corporation allows LANXESS to concentrate on higher-margin specialty chemicals, where it has a stronger competitive advantage.
Financial stability is another major factor. Many companies in the chemicals sector have accumulated significant debt through acquisitions and expansions. Selling non-core assets provides them with much-needed liquidity and helps reduce financial leverage.
Regulatory and sustainability factors are further influencing consolidation trends. With increasing environmental regulations and a growing emphasis on sustainable solutions, many chemical companies are restructuring their portfolios to focus on greener, more environmentally friendly products.