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Celanese (CE) to Acquire Nilit's Nylon Compounding Business

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Celanese CorporationCE , a global technology and specialty materials company, announced that it has signed a definitive agreement with Nilit, a leading producer of high performance nylon polymers, fibers and compounds. Under the deal, Celanese has agreed to buy NilitPlastics, the nylon compounding division of Nilit for an undisclosed price. The nylon product portfolio of Nilit Plastics is regarded by the market for its ability to develop and produce polyamide compounds that are perfect fit for the application.

The acquisition also includes customer agreements and manufacturing, technology and commercial facilities. The deal also includes Nilit materials made under the Frianyl, Nilamid and Ecomid brand names that Celanese plans to integrate into its engineered materials business. However, Nilit will retain possession of the nylon fibers and nylon polymerization businesses worldwide, including facilities in Israel, the United States, China and Brazil.

The acquisition is in sync with Celanese's plans to become a leading, global nylon compound supplier. This deal will help Celanese to extend its global leadership position in the engineered materials business as nylon continues to be adopted in automotive, E&E, consumer and industrial applications.

The transaction, which is subject to customary closing conditions and regulatory approvals, is expected to complete in the second quarter of 2017.

Celanese has outperformed the Zacks categorized Chemicals-Diversified industry in the last three months, partly attributable to its strategic measures including productivity and efficiency improvement actions. The company's shares have gained around 18.2% over this period, compared with roughly 11.7% gain recorded by the industry.

In the fourth quarter 2016, the company's adjusted earnings per share of $1.52; (up 21.6% from year ago quarter) beat the Zacks Consensus Estimate of $1.51. Celanese reported sales of $1,311 million for the quarter, down roughly 1.7% year over year. However, it beat the Zacks Consensus Estimate of $1,295 million.

Celanese sees adjusted earnings per share to increase 8-11% in 2017. The company's productivity actions and agility in its business models are expected to offset tow pricing and currency headwinds. Advanced Engineered Materials is also expected to continue to generate value by commercializing new projects and extending the pipeline model through recent acquisitions.

Celanese Corporation Price and Consensus

Celanese Corporation Price and Consensus | Celanese Corporation Quote

Celanese currently carries a Zacks Rank #2 (Buy).

Other Stocks to Consider

Other favorably placed companies in the chemical space are Albemarle Corp. ALB , Kronos Worldwide Inc. KRO and Methanex Corp. MEOH .

Albemarle has an expected long-term growth of 10% and carries Zacks Rank #2.

Kronos has an expected long-term growth of 5% and carries Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.

Methanex has an expected long-term growth of 15% and carries Zacks Rank #1.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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