DL Chemical buying Houston's Kraton for $1.6 billion

DL Chemical headquarters located in Jung District in Central Seoul [DL CHEMICAL]

Kraton logo [DL CHEMICAL]

DL Chemical is buying Kraton, a Houston-based petrochemical company, for $1.6 billion. The purchase was approved by the company’s board on Sept. 27.

The acquisition is expected to help DL Chemical expand its product lineup from polyethylene and polybutene to more value-added materials. It will also help DL Chemical gain access to more countries utilizing Kraton's sales and logistics networks.

“DL Chemical plans to commercialize Kraton’s innovative products that are currently in development,” said Kim Sang-woo, vice chairman of DL Chemical, in a release Tuesday. “DL Chemical also plans to improve profitability of Kraton by applying DL Chemical’s managing capacity in operating manufacturing facilities and equipment.”

Kraton is a global petrochemical company, that has a number of proprietary technologies for manufacturing various chemical materials. It runs 13 manufacturing facilities globally and five research and development centers.

Its core products include styrene block copolymer (SBC), which is a thermoplastic elastomer often used in tubes, containers and food packaging.

The petrochemical company also manufactures bio chemicals utilizing byproducts from pine tree pulp.

"Through the latest acquisition, DL Chemical will internalize some core technologies that used to be monopolized by a few countries, including the United States, Japan and Germany," Vice Chairman Kim said.

BY JIN EUN-SOO [jin.eunsoo@joongang.co.kr]