05:40 AM | May 23, 2013 | Natasha Alperowicz
Shin-Etsu Chemical has acquired the 50% stake it did not already own in Asia Silicones Monomer (ASM; Rayong, Thailand) from General Electric Co.(GE) for 15 billion Japanese yen ($147.4 million), the company announced Thursday. ASM operates a 70,000 m.t./year of siloxanes plant at Map ta Phut, Thailand. Siloxanes is the monomer used to make silicones.
GE sold its silicones and quartz business to Apollo Management in 2006 but retained the stake in ASM, which was formed by GE and Shin-Etsu in 2001. Apollo operates the former GE silicones and quartz business as Momentive Performance Materials. GE, under terms of the 2006 deal with Apollo, agreed to supply Momentive with a minimum annual supply of siloxane from ASM or an alternative source through December 2026.
Momentive says that it has signed a new purchase agreement with ASM in connection with GE’s exit from the jv. Momentive says the agreement will provide it a long-term supply of siloxane from ASM through 2026 with an option to extend the agreement through 2036. The agreement also replaced the long-term supply agreement that required GE to ensure supply of siloxane. In connection the agreements, Momentive says it received a one-time payment of approximately $101.8 million from GE.
Shin-Etsu, meanwhile, says the deal will allow it to further integrate the operations of ASM with its wholly owned downstream silicones operations in Thailand. “Shin-Etsu will expand its business in the Asian region by optimizing the efficiency of its silicone business operations in Thailand,” the company says.