Blackstone Celanese Essay

2769 words - 12 pages


The Blackstone Bid for Celanese AG
  In  late  summer  2003,  The  Blackstone  Group  LP  was  contemplating  whether  to  launch  a  tender  offer  for  Celanese  AG’s  common  shares  as  a  means  of  effecting  a  friendly  takeover.  Blackstone  needed to formulate specific terms of an offer. The transaction, if successful, would constitute the  largest European public‐to‐private transaction in history.       The Blackstone Group LP in 2003  The  Blackstone  Group  LP  (Blackstone)  was  a  private  equity  firm  founded  in  1985  by  industry  veterans  Peter  Peterson,  its  chairman,  and  Stephen  Schwarzman,  its  CEO.  The  firm  managed  ...view middle of the document...

Professor Nabil N. El-Hage and Professor Timothy A. Luehrman, of HBS, and Heide Abelli (MBA 1993 and former equity analyst) prepared this reading. Copyright © 2009 Harvard Business School Publishing. No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means—electronic, mechanical, photocopying, recording, or otherwise—without the permission of Harvard Business Publishing. Harvard Business Publishing is an affiliate of Harvard Business School.

The Blackstone Bid for Celanese AG

    Celanese AG in 2003  Celanese  AG  (Celanese)  was  a  global  industrial  chemicals  manufacturer  headquartered  in  Kronberg,  Germany.  In  2002,  Celanese  had  revenues  of  €4.3  billion  (US$4.9  billion)  and  10,700  employees  worldwide.  It  was  operating  in  a  difficult  market  environment,  reflecting  the  recent  turn of the chemicals cycle: 2002 sales were down 9% from the previous year.   Celanese  operated  25  production  facilities  in  11  countries  in  the  Americas,  Europe,  and  Asia,  as  well as six research & development centers. In 2003, Celanese generated 47% of net sales in North  America, 41% in Europe, 11% in Asia and Australia, and 1% in the rest of the world. Nevertheless,  in many respects, Celanese was a U.S. company. The bulk (62%) of Celanese’s assets were located  in North America (48% in the United States), as were its employees (59% in North America, 42%  specifically in the United States).   Celanese operated in five principal business segments: Acetyl Products (49% of sales at Q3 2003);  Chemical  Intermediates  (19%  sales);  Acetate  Products  (13%);  Ticona,  which  produced  technical  polymers (16%); and Performance Products/Nutrinova, which produced artificial sweeteners (3%).  Celanese held No. 1 or No. 2 market positions in more than 70% of its product areas.    Celanese  had  a  long  and  rich  history  with  both  European  and North  American  roots.  In  1912,  a  European  entrepreneur,  Alexander  Clavel‐Respinger,  and  Dreyfus  brothers  Henri  and  Camille  founded Cellonit Gesellschaft Dreyfus & Co. in Switzerland to produce fireproof celluloid out of  cellulose  acetate.  In  the  buildup  to  World  War  I,  the  Dreyfus  brothers  diversified  into  manufacturing airplane paint. At the same time, a U.S. Celanese company was set up. However,  when  the  war  ended  in  1918,  paint  contracts  dried  up  and  Celanese  switched  to  commercial  production of acetate yarn. After World War II, the use of acetate tow in cigarette filters opened  up a large new business area. Meanwhile, in the United States, Celanese also established plants in  Texas for the production of acetaldehyde, formaldehyde, methanol, and acetone.   In  1961,  Hoechst  AG  of  Germany  and  Celanese  Corporation  of  America ...

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