Celanese Corporation, a global chemical and specialty materials company, announced two joint venture (JV) actions with Mitsui & Co., Ltd. to extend their longstanding strategic partnership.

Celanese announced the signing of a term sheet to form a Food Ingredients JV with Mitsui, subject to customary approvals. Through this transaction, Celanese will contribute its Food Ingredients business, inclusive of assets, technology, and employees, to form a standalone Food Ingredients JV. Celanese will retain a 30 percent ownership stake in the JV and Mitsui will acquire a 70 percent ownership stake.

Celanese Food Ingredients is a leading producer of acesulfame potassium (Ace-K) sweetener as well as sorbic acid and potassium sorbate preservatives. Celanese is the inventor and only Western-producer of Sunett Ace-K which is a zero-calorie, high-intensity sweetener.

On a pro-forma basis, the Food Ingredients business generated approximately $170 million in 2022 net sales and $45 to $50 million in 2022 EBITDA.

The Food Ingredients JV will combine the leading technology, product portfolio, and backward integration of Celanese with Mitsui’s long-standing positions in a variety of food supply chains across Asia and other regions. Celanese’s Acetyl Chain business will continue to meet the full acetyls raw material needs of the Food Ingredients JV under a long-term supply agreement.

The parties expect the transaction to close during the third quarter of 2023. Celanese expects to utilize cash proceeds from the JV formation to execute against its existing deleveraging plan.

Celanese is advised by BofA Securities as financial advisor and Shearman & Sterling LLP as legal counsel.

Celanese and Mitsui have also agreed on a long-term extension of their existing Fairway Methanol LLC JV which produces methanol at Celanese’s Clear Lake facility. Existing JV terms and ownership were extended through 2045.

Later this year, the Fairway MethanolJV expects to complete a low capital capacity expansion to 1.62 million metric tons, and will begin utilizing recycled carbon dioxide (CO2) as an alternative feedstock for methanol production. An estimated 60 percent of currently vented process CO2 from the entire Clear Lake site will be transformed into sustainable methanol each year.

“Mitsui has been a trusted and collaborative partner to Celanese for many years and we are pleased to be taking these actions to extend our strategic partnership across these two JVs,” said Lori Ryerkerk, chairman and chief executive officer. “The formation of a Food Ingredients JV will allow us to monetize a majority of that business in a value accretive way and also maintain the demand benefits of raw material integration with the Acetyl Chain. Cash proceeds will be fully utilized to pay down debt and this transaction will represent a meaningful early step in executing against our deleveraging plan.”