Exxon explores sale of elastic polymer business: sources By Reuters

© Reuters. FILE PHOTO: Logo of the Exxon Mobil Corp is seen at the Rio Oil and Gas Expo and Conference in Rio de Janeiro

By Joshua Franklin and Greg Roumeliotis

(Reuters) – Exxon Mobil Corp (NYSE:) is exploring a sale of its Advanced Elastomer Systems (AES (NYSE:)) 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:) 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.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.


Most Related Links :
Business News Governmental News Finance News

Need Your Help Today. Your $1 can change life.

[charitable_donation_form campaign_id=57167]

Source link

Back to top button