Westlake Chemical to acquire Hexion’s epoxy business for $1.2bn

HOUSTON (ICIS)–Westlake Chemical has entered into a definitive agreement to acquire Hexion’s global epoxy business for about $1.2bn, it said on Wednesday.

With the acquisition, expected to close in H1 2022, Westlake will “significantly expand” its integrated business by adding a downstream portfolio of coatings and composite products to its chloro-vinyls businesses, it said.

“The industries served by Hexion Epoxy are very attractive to Westlake and the business is expected to be a synergistic addition to Westlake’s existing businesses,” said Westlake’s CEO, Albert Chao.

He highlighted the role of epoxy in the light-weighting of structural components for automobiles and for renewable energy, particularly the composite blades used by wind turbines.

Hexion’s epoxy business produces epoxy resins, modifiers and curing agents for high-performance materials, coatings and composites.

The integrated business includes upstream base epoxy resins and intermediates delivered as liquid or solid epoxy resins, as well downstream specialty epoxy resins used in coatings and composites.

It has eight manufacturing facilities and five research and development labs located in Asia, Europe and the US, as well as tolling sites in Asia.

Based in Rotterdam, Netherlands, the epoxy business had sales about $1.5bn for the 12 months ended 30 September.

Westlake’s agreement to buy the business comes after Hexion announced late September that it was evaluating strategic options, including a spinoff of its epoxy-based coatings and composites business (Hexion Coatings and Composites), and an initial public offering (IPO) of its adhesives and versatic acids and derivatives product lines (Hexion Holdings).

In an interview with ICIS last week, Hexion’s CEO Craig Rogerson said that the company already filed an S-1 registration statement with the US Securities and Exchange Commission (SEC) for an IPO of the adhesives and versatic acids business for listing on the New York Stock Exchange.

Shares of Hexion currently trade on an over-the-counter (OTC) market.

In April, Hexion closed the sale of its phenolic specialty resins, hexamine and European-based forest products resins businesses to Black Diamond and Investindustrial for $425m.

Additional reporting by Joseph Chang

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