Global Petrochemical Company US Crayton Acquired for $1.6 Billion
Leading SBC Market Share Holder in US and Europe
Utilizing Over 800 Patents Secured Through M&A to Localize Core Materials
[Asia Economy Reporter Kim Hyewon] DL Group (formerly Daelim Group) has executed the largest merger and acquisition (M&A) in its history. As it accelerates new growth businesses and advances as a global petrochemical company, its affiliate DL Chemical has made a quantum leap by acquiring a leading U.S. company with the world's top technology.
DL Chemical announced on the 28th that at the board meeting held on the afternoon of the 27th, it resolved to acquire 100% of the shares of U.S. petrochemical company Kraton at $46.5 per share, totaling $1.6 billion (approximately 1.88 trillion KRW). DL Chemical plans to complete the acquisition process by the first half of next year by raising the necessary funds through its own cash reserves and acquisition financing using leveraged buyout methods.
With this M&A, DL Chemical has rapidly advanced beyond a traditional petrochemical company to become the number one styrene block copolymer (SBC) manufacturer in the U.S. and Europe and a bio-chemical company.
Kraton operates 13 production plants and 5 research and development (R&D) centers across major markets worldwide, including the U.S. and Europe, through its polymer and chemical business divisions. Last year, it recorded total sales of $1.563 billion and an adjusted EBITDA of $262 million. Notably, the polymer division's main product, SBC, holds the number one market share in the U.S. and Europe. SBC is an advanced technology material used in hygiene adhesives, medical supplies, automotive interiors, and 5G cables.
Kraton is also renowned as the largest bio-chemical company producing chemical products by refining byproducts generated during the production of pine pulp. The company's bio-chemical production capacity is 700,000 tons annually, producing materials ranging from eco-friendly fuels like biodiesel to high-performance tire materials and environmentally friendly adhesives.
DL Chemical focused on Kraton's unparalleled technology, which holds over 800 patents. The SBC produced by Kraton is a high value-added synthetic rubber. DL Chemical plans to utilize the patents acquired through this acquisition to localize core materials and expand its market presence into Asia.
Kim Sangwoo, Vice Chairman of DL Chemical, stated, "DL Chemical will commercialize the innovative products currently being developed by Kraton at an early stage and enhance Kraton's profitability by integrating DL Chemical's process operation and facility management capabilities. Through this acquisition, we plan to localize core technologies that have been monopolized by a few technologically advanced countries such as the U.S., Japan, and Germany in the global supply chain, and actively expand investments in the high-growth Asian market."
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