West German Chemicals Giant to Buy Celanese : Hoechst AG Agrees to Pay $2.85 Billion; U.S. Firm Sees Growth Opportunity

Celanese Corp., a leading U.S. producer of fibers and chemicals, said Monday that it has agreed to be acquired by West German chemicals giant Hoechst AG for about $2.85 billion.

Celanese, having just completed a four-year restructuring and stock-buyback program aimed at cutting costs and boosting the value of its shares, termed the proposed merger an “unprecedented opportunity” for the company to accelerate its expansion in world markets and to tap new products and technologies.

The merger “provides a significant additional increase in value to our shareholders and, equally important, increased growth opportunities to our employees,” John D. Macomber, Celanese’s chairman and chief executive, said in a statement.

Analysts said the deal, which was approved by both companies’ directors, also reflects a growing effort by foreign chemical companies to expand their presence in the U.S. market.

Under the agreement, American Hoechst Corp., Hoechst’s U.S. subsidiary based in Somerville, N.J., will acquire Celanese through a tender offer of $245 for each of Celanese’s 11.63 million common shares outstanding.

Stock Price Jumps

After the announcement, Celanese’s stock jumped $24 a share to $242.50 in New York Stock Exchange composite trading.

Amid Celanese’s restructuring and stock-buyback efforts, which included the repurchase of 4.9 million shares between April, 1984, and January, 1986, the stock has soared from about $70 a share in late 1984.

New York-based Celanese, which earned $178 million last year on revenue of $3.05 billion, makes such fibers as Fortrel polyester. Its fibers, which accounted for 48.2% of its overall sales last year, are used to make apparel, industrial products and cigarette filters.

The company also produces basic chemicals and specialty chemicals used to make resins, engineered plastics and bleaching agents.

Hoechst, headquartered in Frankfurt, also has interests in chemicals, plastics and fibers, along with pharmaceuticals. The company is one of the 25 largest industrial concerns outside the United States, with worldwide revenue of $14.5 billion in 1985, including $1.7 billion contributed by American Hoechst.

Celanese and Hoechst noted that they have worked together for 25 years on joint ventures, technical exchanges and licensing agreements, and Celanese spokesman Joseph Singer said the merger proposal was a mutual suggestion that developed out of talks the companies held on other projects.

“The logical synergism is to merge with someone who’s a friend,” Singer said.

He also said the merger would expand Celanese’s business “in one big quantum leap that we couldn’t do by ourselves” and would specifically bolster Celanese’s interests in dyes and pigments, agricultural chemicals and pharmaceuticals.

Analysts said the Celanese-Hoechst merger, which is expected to leave Celanese’s management team essentially intact, fits a recent pattern of foreign chemical companies using acquisitions to boost U.S. sales.

“Large international chemical companies are interested in increasing their share in the United States,” said Mary Schoenbrod, a chemicals analyst with the securities research firm Duff & Phelps in Chicago. “They want to be a key player in the biggest market of all.”

She pointed to last year’s acquisition of Beatrice Cos.’ chemical division by Imperial Chemical Industries PLC of Britain and the 1985 purchase of United Technologies’ chemical interests by BASF of West Germany.

Jay Meltzer, who follows Celanese for the investment firm Goldman, Sachs & Co. in New York, said Hoechst also “will clearly benefit from a proven marketing and merchandising organization, which they’re getting” in Celanese.

In a related development, Standard & Poor’s said it has placed American Hoechst’s BBB+ rated senior debt on its creditwatch list for possible upgrade.

The securities rating agency also said that it placed Celanese’s A- rated senior debt, its BBB+ rated convertible subordinated debentures and its BBB+ rated preferred stock on its creditwatch list with developing implications, which means that the ratings may be raised, lowered or affirmed at their current levels.