Exxon explores sale of elastic polymer business: sources
Reuters
Published Apr 07, 2021 01:19PM ET
By Joshua Franklin and Greg Roumeliotis
(Reuters) - Exxon Mobil Corp (NYSE:XOM) is exploring a sale of its Advanced Elastomer Systems (AES (NYSE:AES)) division, potentially valuing the elastic polymer maker at around $800 million including debt, according to people familiar with the matter.
The deal would allow the oil major to nibble at its debt pile, which totaled $45.5 billion at the end of December. Its shares are up around 37% year-to-date on investor expectations that the company will benefit from a recovery in energy prices.
Exxon has hired investment bank Morgan Stanley (NYSE:MS) to solicit interest in AES from potential buyers, including private equity firms, the sources said.
The sources cautioned that no deal is certain and requested anonymity because the matter is confidential. Exxon and Morgan Stanley declined to comment.
Exxon incurred a historic loss of $22.4 billion last year. It is trying to convince a skeptical Wall Street that it can rebound after years of overspending left it deeply indebted and lagging rivals better geared for a world demanding cleaner fuels.
AES is known for its Santoprene thermoplastic vulcanizates (TPVs), which are elastic polymers used in automotive, industrial and consumer products. The business was launched in 1991 as a limited partnership between ExxonMobil Chemical and Solutia. Exxon became the sole owner of AES in 2002.
The global TPV market is seen growing from $1.6 billion in 2019 and to $2.6 billion in 2027, though the industry has been adversely affected by the COVID-19 pandemic due to factory shutdowns and supply chain issues, according to a report by ResearchAndMarkets.com.
Get The News You Want
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.