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Celanese to buy DuPont’s materials unit for $11 billion

Yahoo Finance's Julie Hyman and Brian Sozzi discuss Celanese's plans to buy DuPont's materials arm for $11 billion.

Video Transcript

BRIAN SOZZI: Celanese pulling out its wallet and spending big on a division from DuPont.

JULIE HYMAN: Yeah, exactly. So this is something that was reported on initially by Bloomberg, and then it actually happened. So Celanese is buying the majority of DuPont's mobility and materials arm. $11 billion is the price on this. It is the biggest ever acquisition that Celanese had made. And it seems like there was a little bit of bidding from it from private equity as well. Celanese not exactly a household name, but it makes chemicals and other products for their components for things like paint, for example.

And DuPont, the unit it is buying, makes polymers and resins that go into a lot of different stuff-- cars, electronics, consumer products. So definitely bulking up the business here. And Celanese says-- you know, you always hear about synergies with this kind of a deal. $450 million, it says, of synergies within four years. And it's going to add $4 or more to its adjusted earnings per share by 2026. This is one of the biggest deals, by the way, that's been announced thus far this year. Obviously, this year has not gone on for very long yet. But it looks like it is--

BRIAN SOZZI: It feels like it.

JULIE HYMAN: You got that right. But yes, it is a pretty sizable deal that we are watching this morning.

BRIAN SOZZI: And just something to tuck away before we head to break, Julie. We continue to see the unwinding of very old manufacturing companies here. Of course, you see the Celanese deal with DuPont. Saw GE plant its stake in the ground. They're splitting up into many different companies. 3M recently sold off divisions.

So a lot of these companies, I think internally, those old school industrial powerhouses are really having a coming of age moment where they realize that that conglomerate model probably is not getting the love it deserves here in the market. So why not try to spin off some divisions here and boost market value in that way?