Celanese and Blackstone to Form Joint Venture in Acetate Tow

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Brings together complementary tow portfolios to drive innovation and
enhance cost competitiveness;

Proceeds from transaction to be deployed in high-growth businesses
at Celanese

  • Proposed joint venture (JV) to combine Celanese’s Cellulose
    Derivatives and Blackstone’s Rhodia Acetow businesses.
  • Combination to create a global acetate tow supplier with increased
    ability to serve customers efficiently and reliably while enhancing
    opportunities for innovation and productivity.
  • Celanese and Blackstone will own 70% and 30% of the JV, respectively.
  • JV to distribute $1.6 billion in cash to Celanese at close.
  • Transaction to be earnings per share neutral for Celanese in the first
    year and accretive thereafter.

DALLAS & NEW YORK & LONDON–(BUSINESS WIRE)–
Celanese Corporation (NYSE:CE), a global technology and specialty
materials company, and funds managed by Blackstone (NYSE:BX), one of the
world’s leading investment firms, today announced a definitive agreement
to form a JV that will create a global acetate tow supplier. Celanese
and Blackstone will own 70 percent and 30 percent of the JV,
respectively.

Transaction Overview

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 new company is expected to generate 2017 annual pro forma revenue of
approximately $1.3 billion with around 2,400 employees. 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.

“This is an exciting opportunity for Celanese to partner with Blackstone
in a way that creates significant value for all stakeholders. The
combination of these tow assets will enhance our ability to serve
customers more efficiently and reliably from a global production
footprint while also creating growth opportunities for employees,” said
Mark Rohr, chairman and chief executive officer of Celanese. “Celanese
has delivered strong results in the last several years through
differentiated business models. This transaction gives us the
opportunity to partially monetize Cellulose Derivatives and reallocate
significant capital to higher growth businesses within Celanese to
accelerate our growth momentum.”

Lionel Assant, Head of Private Equity Europe at Blackstone, said: “The
combination of these two companies provides an excellent opportunity to
create a new, international business focused on innovation and growth to
the benefit of its customers and employees. We are excited to work with
Celanese on this strategic development.”

Governance and Management

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.

Financial Highlights

Related to this transaction, commitments for $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 $1.6
billion will be distributed to Celanese following the formation of the
JV. Celanese is expected to deploy the proceeds in value uplift
opportunities, including investment in organic growth, acquisitions,
share repurchases and debt reduction.

Pursuant to the terms of the agreement, once approved and upon closing,
Celanese is expected to consolidate JV results in its financial
statements, subject to Blackstone’s minority interest.

Celanese is committed to maintaining its investment grade rating.

Approvals and Time to Close

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.

Conference Call with Celanese Management at 8:30 a.m. Eastern, June
19, 2017

Celanese management will host a conference call tomorrow at 8:30 a.m.
Eastern Daylight time. Mark Rohr, chairman and chief executive officer,
Scott Sutton, chief operating officer, and Chris Jensen, chief financial
officer, will be available to discuss the JV, Celanese’s broader
corporate strategy, and capital allocation priorities. The Company’s
presentation and prepared remarks can be found on its website at www.celanese.com
under Investor Relations/Events and Presentations. This call will be
available by webcast at www.celanese.com
in the Investor Relations section or by phone:

Dial-in Number: 1-866-235-9919

International Dial-in Number: 1-412-902-4105

Please ask for the Celanese Webcast

Alternatively, to enter the call immediately without waiting for
operator assistance, attendees may pre-register for the call by clicking
the link below. Once registered, attendees will receive an Outlook
calendar invite with the date and time of call, the dial-in phone number
and the unique attendee pin which is sent automatically to the email
address provided.

http://dpregister.com/10109308

An audio replay and transcript of the webcast will be available at the
same link. The materials will be filed with the Securities and Exchange
Commission on a Form 8-K prior to the call.

About Celanese

Celanese Corporation is a global technology leader in the production
of differentiated chemistry solutions and specialty materials used in
most major industries and consumer applications. Our two complementary
business cores, Acetyl Chain and Materials Solutions, use the full
breadth of Celanese’s global chemistry, technology and business
expertise to create value for our customers and the corporation. As we
partner with our customers to solve their most critical business needs,
we strive to make a positive impact on our communities and the world
through The Celanese Foundation. Based in Dallas, Celanese currently
employs approximately 7,500
 employees worldwide and had 2016
net sales of $5.4 billion. For more information about Celanese
Corporation and its product offerings, visit 
www.celanese.com or
our blog at 
www.celaneseblog.com.

All registered trademarks are owned by Celanese International
Corporation or its affiliates.

About Blackstone

Blackstone is one of the world’s leading investment firms. We seek to
create positive economic impact and long-term value for our investors,
the companies we invest in, and the communities in which we work. We do
this by using extraordinary people and flexible capital to help
companies solve problems. Our asset management businesses, with over
$360 billion in assets under management, include investment vehicles
focused on private equity, real estate, public debt and equity,
non-investment grade credit, real assets and secondary funds, all on a
global basis. Further information is available at
www.blackstone.com.
Follow Blackstone on Twitter @Blackstone.

About Rhodia Acetow

Rhodia Acetow, headquartered in Freiburg, Germany, is a global leader
in cellulose acetate tow used in the manufacturing of cigarette filters.
It operates plants in Germany, Brazil, France, Russia and the USA.

Forward-Looking Statements

This release may contain “forward-looking statements,” which include
information concerning the Company’s plans, objectives, goals,
strategies, future revenues, synergies or performance, financing needs
and other information that is not historical information. All
forward-looking statements are based upon current expectations and
beliefs and various assumptions, including the announced joint venture.
There can be no assurance that the Company will realize these
expectations or that these beliefs will prove correct. There are a
number of risks and uncertainties that could cause actual results to
differ materially from the results expressed or implied in the
forward-looking statements contained in this release, including with
respect to the joint venture. These risks and uncertainties include,
among other things: changes in general economic, business, political and
regulatory conditions in the countries or regions in which we operate;
the length and depth of product and industry business cycles,
particularly in the automotive, electrical, textiles, electronics and
construction
industries; changes in the price and availability of
raw materials, particularly changes in the demand for, supply of, and
market prices of ethylene, methanol, natural gas, wood pulp and fuel oil
and the prices for electricity and other energy sources; the ability to
pass increases in raw material prices on to customers or otherwise
improve margins through price increases; the ability to maintain plant
utilization rates and to implement planned capacity additions and
expansions; the ability to reduce or maintain their current levels of
production costs and to improve productivity by implementing
technological improvements to existing plants; the ability to identify
desirable potential acquisition targets and to consummate acquisition or
investment transactions consistent with the Company’s strategy;
increased price competition and the introduction of competing products
by other companies; changes in the degree of intellectual property and
other legal protection afforded to our products or technologies, or the
theft of such intellectual property; compliance and other costs and
potential disruption or interruption of production or operations due to
accidents, interruptions in sources of raw materials, cyber security
incidents, terrorism or political unrest or other unforeseen events or
delays in construction or operation of facilities, including as a result
of geopolitical conditions, the occurrence of acts of war or terrorist
incidents or as a result of weather or natural disasters; potential
liability for remedial actions and increased costs under existing or
future environmental regulations, including those relating to climate
change; potential liability resulting from pending or future litigation,
or from changes in the laws, regulations or policies of governments or
other governmental activities in the countries in which we operate;
changes in currency exchange rates and interest rates; our level of
indebtedness, which could diminish our ability to raise additional
capital to fund operations or limit our ability to react to changes in
the economy or the chemicals industry; and various other factors
discussed from time to time in the Company’s filings with the Securities
and Exchange Commission.

In addition to the risks and uncertainties identified above, the
following risks and uncertainties, among others, could cause the
Company’s actual results of operations regarding the joint venture to
differ materially from the results expressed or implied in this press
release: the timing or ultimate completion of the transaction as the
transaction is subject to closing conditions, including antitrust
clearance; the expected benefits of the transaction may not materialize
as expected; ability to successfully implement the integration strategy
for the joint venture; and the ability to ensure continued performance
or market growth of the combined tow businesses. Any forward-looking
statement speaks only as of the date on which it is made, and the
Company undertakes no obligation to update any forward-looking
statements to reflect events or circumstances after the date on which it
is made or to reflect the occurrence of anticipated or unanticipated
events or circumstances.

Non-GAAP Financial Measures

Presentation

This document presents the Company’s business segments in two
subtotals, reflecting our two cores, the Acetyl Chain and Materials
Solutions, based on similarities among customers, business models and
technical processes. As described in the Company’s annual report on Form
10-K and quarterly reports on Form 10-Q, the Acetyl Chain includes the
Company’s Acetyl Intermediates segment and the Industrial Specialties
segment. Materials Solutions includes the Company’s Advanced Engineered
Materials segment and the Consumer Specialties segment. The Company’s
cellulose derivatives business is included in the Consumer Specialties
segment.

Use of Non-US GAAP Financial Information

This release uses the following Non-US GAAP measures: adjusted EBIT,
adjusted EBIT margin, adjusted earnings per share, return on invested
capital (adjusted) and free cash flow. These measures are not recognized
in accordance with US GAAP and should not be viewed as an alternative to
US GAAP measures of performance or liquidity. The most directly
comparable financial measure presented in accordance with US GAAP in our
consolidated financial statements for adjusted EBIT is net earnings
(loss) attributable to Celanese Corporation; for adjusted EBIT margin is
operating margin; for adjusted earnings per share is earnings (loss)
from continuing operations attributable to Celanese Corporation per
common share-diluted; for return on invested capital (adjusted) is net
earnings (loss) attributable to Celanese Corporation divided by the sum
of the average of beginning and end of the year short- and long-term
debt and Celanese Corporation stockholders’ equity; and for free cash
flow is net cash provided by (used in) operations.

Definitions of Non-US GAAP Financial Measures

Adjusted EBIT is a performance measure used by the Company and is
defined by the Company as net earnings (loss) attributable to Celanese
Corporation, plus (earnings) loss from discontinued operations, less
interest income, plus interest expense, plus refinancing expense and
taxes, and further adjusted for Certain Items (refer to Table 8 of our
Non-US GAAP Financial Measures and Supplemental Information document).
We may provide guidance on adjusted EBIT but are unable to reconcile
forecasted adjusted EBIT to a US GAAP financial measure without
unreasonable efforts because a forecast of Certain Items, such as
mark-to-market pension gains and losses, which may be significant, is
not practical. Adjusted EBIT margin is defined by the Company as
adjusted EBIT divided by net sales.

Adjusted EBIT by core (i.e. Acetyl Chain and/or Materials Solutions)
may also be referred to by management as core income. Adjusted EBIT
margin by core may also be referred to by management as core income
margin. Adjusted EBIT by business segment may also be referred to by
management as segment income. Adjusted EBIT margin by business segment
may also be referred to by management as segment income margin.

Adjusted earnings per share is a performance measure used by the
Company and is defined by the Company as earnings (loss) from continuing
operations attributable to Celanese Corporation, adjusted for income tax
(provision) benefit, Certain Items, and refinancing and related
expenses, divided by the number of basic common shares and dilutive
restricted stock units and stock options calculated using the treasury
method. We may provide guidance on adjusted earnings per share but are
unable to reconcile forecasted adjusted earnings per share to a US GAAP
financial measure without unreasonable efforts because a forecast of
Certain Items, such as mark-to-market pension gains and losses, which
may be significant, is not practical.

Note: The income tax expense (benefit) on Certain Items (“Non-GAAP
adjustments”) is determined using the applicable rates in the taxing
jurisdictions in which the Non-GAAP adjustments occurred and includes
both current and deferred income tax expense (benefit). The income tax
rate used for adjusted earnings per share approximates the midpoint in a
range of forecasted tax rates for the year. This range may include
certain partial or full-year forecasted tax opportunities and related
costs, where applicable, and specifically excludes changes in uncertain
tax positions, discrete recognition of GAAP items on a quarterly basis,
other pre-tax items adjusted out of our GAAP earnings for adjusted
earnings per share purposes and changes in management’s assessments
regarding the ability to realize deferred tax assets for GAAP. In
determining the adjusted earnings per share tax rate, we reflect the
impact of foreign tax credits when utilized, or expected to be utilized,
absent discrete events impacting the timing of foreign tax credit
utilization. We analyze this rate quarterly and adjust it if there is a
material change in the range of forecasted tax rates; an updated
forecast would not necessarily result in a change to our tax rate used
for adjusted earnings per share. The adjusted tax rate is an estimate
and may differ from the actual tax rate used for GAAP reporting in any
given reporting period. Table 3a of our Non-US GAAP Financial Measures
and Supplemental Information document summarizes the reconciliation of
our estimated GAAP effective tax rate to the adjusted tax rate. The
estimated GAAP rate excludes discrete recognition of GAAP items due to
our inability to forecast such items. As part of the year-end
reconciliation, we will update the reconciliation of the GAAP effective
tax rate to the adjusted tax rate for actual results.

Return on invested capital (adjusted) is defined by the Company as
adjusted EBIT, tax effected using the adjusted tax rate, divided by the
sum of the average of beginning and end of the year short- and long-term
debt and Celanese Corporation stockholders’ equity. We believe that
return on invested capital (adjusted) provides useful information to
management, investors, analysts and other parties in order to assess our
income generation from the point of view of our stockholders and
creditors who provide us with capital in the form of equity and debt and
whether capital invested in the Company yields competitive returns. In
addition, achievement of certain predetermined targets relating to
return on invested capital (adjusted) is one of the factors we consider
in determining the amount of performance-based compensation received by
our management.

Free cash flow is a liquidity measure used by the Company and is
defined by the Company as cash flow from operations, less capital
expenditures on property, plant and equipment, and adjusted for capital
contributions from or distributions to Mitsui & Co., Ltd. (“Mitsui”)
related to our methanol joint venture, Fairway Methanol LLC (“Fairway”).

Reconciliation of Non-US GAAP Financial Measures

Reconciliations of the Non-US GAAP financial measures used in this
press release to the comparable US GAAP financial measure, together with
information about the purposes and uses of Non-US GAAP financial
measures, are included in our Non-US GAAP Financial Measures and
Supplemental Information documents dated June 18, 2017 filed as an
exhibit to our Current Report on Form 8-K filed with the SEC on June 19,
2017 and also available on our website at
www.celanese.com
under Financial Information, Non-GAAP Financial Measures, or at this
link:
http://investors.celanese.com/interactive/lookandfeel/4103411/Non-GAAP.PDF.

Results Unaudited

The results in this document, together with the adjustments made to
present the results on a comparable basis, have not been audited and are
based on internal financial data furnished to management. Quarterly
results should not be taken as an indication of the results of
operations to be reported for any subsequent period or for the full
fiscal year.

Supplemental Information

Additional information about our prior period performance is included
in our Quarterly Reports on Form 10-Q and in our Non-US GAAP Financial
Measures and Supplemental Information document.

Celanese:
Investor Relations
Surabhi Varshney,
+1 972-443-3078
surabhi.varshney@celanese.com
or
Media
Relations – Global

W. Travis Jacobsen, +1 972-443-3750
william.jacobsen@celanese.com
or
Media
Relations Asia (Shanghai)

Helen Zhang, +86 21 3861 9279
lan.zhang@celanese.com
or
Media
Relations Europe (Germany)

Jens Kurth, +49(0)69 45009 1574
j.kurth@celanese.com
or
Blackstone:
Andrew
Dowler, +44 (0)20 7451 4275
andrew.dowler@blackstone.com

Source: Celanese Corporation