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ExxonMobil (XOM) Divests Santoprene to Celanese for $1.15B
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Exxon Mobil Corporation (XOM - Free Report) recently agreed to divest the global Santoprene business for a whopping $1.15 billion to Celanese Corporation (CE - Free Report) , a chemical specialty company. The Santoprene business caters to automotive, medical and consumer products as well as other industries via developing a special type of rubber.
Celanese is expected to use excess cash and available liquidity from its balance sheet to fund the deal, and receive ExxonMobil’s two manufacturing sites located in Pensacola, FL and Newport in Wales. The Advanced Elastomer Systems Newport unit has a production capacity of 50,000 tons of thermoplastic elastomers per year. The AES business was created in 1991, in which ExxonMobil became the stand-alone owner in 2002.
By 2025, it was about to divest $25 billion worth of assets, per its 2019 plans. The Santoprene divestment is likely to close in the December quarter of this year. Around 350 employees from ExxonMobil will move to Celanese as part of the agreement, per Reuters. Notably, ExxonMobil stated last year that it has plans to lay off a significant number of workers to cut costs.
The latest divestment comes at a time when ExxonMobil is looking for ways to improve profitability in operations. Last year, the company incurred massive losses due to the COVID-19 pandemic. In the first quarter of 2021, it reported strong earnings owing to higher chemical margins and improved realized commodity prices. ExxonMobil is currently streamlining the business via focusing more on core operations. Overall, the company is taking efforts to preserve shareholders’ capital, while lowering costs.
Importantly, ExxonMobil expects the latest move to enable it to focus on primary olefin derivatives. It is likely to continue serving elastomer clients with Butyl rubber and Vistalon. Notably, its chemical unit recorded $1.4 billion in profits for the first quarter, skyrocketing from earnings of $144 million in the year-ago period on significantly higher margins from U.S. and non-U.S. operations.
Price Performance
The stock has gained 9.9% in the past three months compared with 5% rise of the industry it belongs to.
PHX Minerals’ bottom line for 2021 is expected to jump 180% year over year.
Pembina Pipeline’s bottom line for 2021 is expected to rise 42.2% year over year.
Zacks Names “Single Best Pick to Double”
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research SherazMian hand-picks one to have the most explosive upside of all.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
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ExxonMobil (XOM) Divests Santoprene to Celanese for $1.15B
Exxon Mobil Corporation (XOM - Free Report) recently agreed to divest the global Santoprene business for a whopping $1.15 billion to Celanese Corporation (CE - Free Report) , a chemical specialty company. The Santoprene business caters to automotive, medical and consumer products as well as other industries via developing a special type of rubber.
Celanese is expected to use excess cash and available liquidity from its balance sheet to fund the deal, and receive ExxonMobil’s two manufacturing sites located in Pensacola, FL and Newport in Wales. The Advanced Elastomer Systems Newport unit has a production capacity of 50,000 tons of thermoplastic elastomers per year. The AES business was created in 1991, in which ExxonMobil became the stand-alone owner in 2002.
By 2025, it was about to divest $25 billion worth of assets, per its 2019 plans. The Santoprene divestment is likely to close in the December quarter of this year. Around 350 employees from ExxonMobil will move to Celanese as part of the agreement, per Reuters. Notably, ExxonMobil stated last year that it has plans to lay off a significant number of workers to cut costs.
The latest divestment comes at a time when ExxonMobil is looking for ways to improve profitability in operations. Last year, the company incurred massive losses due to the COVID-19 pandemic. In the first quarter of 2021, it reported strong earnings owing to higher chemical margins and improved realized commodity prices. ExxonMobil is currently streamlining the business via focusing more on core operations. Overall, the company is taking efforts to preserve shareholders’ capital, while lowering costs.
Importantly, ExxonMobil expects the latest move to enable it to focus on primary olefin derivatives. It is likely to continue serving elastomer clients with Butyl rubber and Vistalon. Notably, its chemical unit recorded $1.4 billion in profits for the first quarter, skyrocketing from earnings of $144 million in the year-ago period on significantly higher margins from U.S. and non-U.S. operations.
Price Performance
The stock has gained 9.9% in the past three months compared with 5% rise of the industry it belongs to.
Zacks Rank & Other Stocks to Consider
The company currently sports a Zacks Rank #1 (Strong Buy). Other top-ranked players in the energy space include PHX Minerals Inc. (PHX - Free Report) and Pembina Pipeline Corporation (PBA - Free Report) , each having a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
PHX Minerals’ bottom line for 2021 is expected to jump 180% year over year.
Pembina Pipeline’s bottom line for 2021 is expected to rise 42.2% year over year.
Zacks Names “Single Best Pick to Double”
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research SherazMian hand-picks one to have the most explosive upside of all.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>