Indorama Ventures has bought the chemical intermediates businesses of Huntsman Corporation including PO/MTBE, and its surfactants businesses. The transaction is valued at around $2 billion, which comprises a cash purchase price of $1.93 billion along with the transfer of up to $76 million in net underfunded pension as well as other post-employment benefit liabilities. Notably, the cash purchase price includes estimated adjustments to the working capital purchase price.

The transaction significantly lowers Huntsman’s capital-intensive upstream asset base, strengthens its already strong balance sheet, and enables it to further invest and expand its downstream businesses. It also expands the company’s opportunity and flexibility for select strategic and accretive acquisitions, and ongoing opportunistic repurchases of its shares.

The divestiture will also enable Huntsman to generate more stable and consistent margins as well as strong free cash flow.