Celanese and Blackstone to Form Joint Venture in Acetate Tow

Celanese Corporation and funds managed by Blackstone announced a definitive agreement on June 18 to form a JV that will create a global acetate tow supplier. Celanese and Blackstone will own 70% and 30% of the JV, respectively.
Under the terms of the agreement, Celanese will contribute its Cellulose Derivatives business unit, including its equity interest in existing JVs with China National Tobacco Corporation, and Blackstone will contribute its Rhodia Acetow business unit, which it recently acquired from Solvay. The JV will have an extended global footprint that includes eight wholly-owned manufacturing facilities and three existing JV sites.
The new company will be well positioned to meet customers’ current and evolving needs efficiently while providing the highest level of quality and service. The complementary nature of the tow businesses and a combination of technology expertise will result in synergies mainly from optimization of supply chain networks and procurement of raw materials, energy, equipment, and other services.
Upon closing, the JV will be governed by a Board of Directors consisting of three directors appointed by Celanese and two by Blackstone. The board, management team, and name of the new company will be decided at a later date.
Related to this transaction, commitments for US$2.2 billion of debt have been received by the partners on behalf of the JV. The debt is expected to be supported by cash generation at the JV and is largely non-recourse to Celanese and Blackstone. An initial dividend of approximately US$1.6 billion will be distributed to Celanese following the formation of the JV.
Celanese is committed to maintaining its investment grade rating. The formation of the JV is subject to regulatory approvals and customary closing conditions, which will determine the timing of close. Until then, Celanese’s Cellulose Derivatives and Blackstone’s Rhodia Acetow will continue to operate independently.