Trinseo delays sale of styrenics business citing economic uncertainty

HOUSTON (ICIS)–Trinseo is delaying the proposed sale of its styrenics business because of economic uncertainty and deterioration in the financial markets, the company announced Tuesday.

Trinseo said in November that it had begun exploring the divestiture of the business and launched a formal sales process in Q1 2022. The proposed sale included its feedstocks and polystyrene segments as well as its 50% share of Americas Styrenics (AmSty). Trinseo co-owns AmSty with Chevron Phillips Chemical.

Trinseo is a US-based engineered materials and latex binders producer.

“While the separation of the styrenics business is part of our transformation strategy, the current economic and financing environments make it challenging to get a value for the assets that is reflective of their significant cash generation, therefore, we have decided to pause the sale process,” Frank Bozich, President and Chief Executive Officer of Trinseo, said in a news release.

The company specifically cited the economic uncertainty caused by the war in Ukraine, particularly in European energy markets, which it said is keeping Trinseo from getting full financial value for a sale.

The delay in the sale will not change the company’s strategy of becoming a “higher-growth, higher-margin and less volatile specialty material and sustainable solutions provider,” the company said. Trinseo has said that would mean more focus on engineered materials and the coatings, adhesives, sealants and elastomers (CASE) segments.

Bozich laid out the company’s transformation strategy in an interview with ICIS in June.

News of the delay did not immediately sit well with investors. Trinseo’s stock price fell 14% after the announcement.

The company was active in mergers and acquisitions (M&A) this past year. In September it acquired acrylic materials company Aristech Surfaces for $445m. In May, it completed its $1.36bn acquisition of Arkema’s polymethyl methacrylate (PMMA) business. On the divestiture side, it sold its synthetic rubber business to Synthos for $491m in December.

Besides PMMA, Trinseo’s segments are latex binders, engineered materials and base plastics.

Base plastics makes acrylonitrile butadiene styrene (ABS), styrene acrylonitrile (SAN) and polycarbonate (PC).

Engineered materials makes thermoplastic elastomers (TPEs), PC compounds, ABS compounds and blends of PC.

Latex binders makes styrene butadiene latex and styrene acrylate latex.