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Acquisitions, Dispositions and Plant Closures
 12 Months Ended
Dec. 31, 2022
Acquisitions, Dispositions and Plant Closures [Abstract]  
Acquisitions, Dispositions and Plant Closures Acquisitions, Dispositions and Plant Closures
Acquisitions
•    Santoprene
In December 2021, the Company acquired the Santoprene™ thermoplastic vulcanizates ("TPV") elastomers business of Exxon Mobil Corporation ("Santoprene") for a purchase price of $1.15 billion in an all-cash transaction. The Company acquired the Santoprene™, Dytron™ and Geolast™ trademarks and product portfolios, customer and supplier contracts and agreements, both production facilities producing TPV, the TPV intellectual property portfolio with associated technical and R&D assets and employees of the TPV elastomer business. The acquisition of Santoprene substantially strengthens the Company's existing elastomers portfolio, allowing the Company to bring a wider range of functionalized solutions into targeted growth areas including future mobility, medical and sustainability. The acquisition was accounted for as a business combination and the acquired operations are included in the Engineered Materials segment.
The Company allocated the purchase price of the acquisition to identifiable assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date. The purchase price allocation was based upon preliminary information. During the measurement period, there were no adjustments that materially impacted the Company's goodwill initially recorded.
•    Mobility & Materials
On November 1, 2022, the Company acquired 100% ownership of entities and assets consisting of a majority of the Mobility & Materials business ("M&M") of DuPont de Nemours, Inc. ("DuPont") (the "M&M Acquisition") for a purchase price of $11.0 billion, subject to transaction adjustments, in an all-cash transaction. The Company acquired a global production network of 29 facilities, including compounding and polymerization, customer and supplier contracts and agreements, an intellectual property portfolio, including approximately 850 patents with associated technical and R&D assets, and approximately 5,000 employees across the manufacturing, technical, and commercial organizations. This acquisition of M&M enhances the engineered materials product portfolio by adding new polymers, brands, product technology, and backward integration in critical polymers, allowing the Company to accelerate growth in high-value applications including future mobility, connectivity and medical. The acquisition was accounted for as a business combination and the acquired operations are included in the Engineered Materials segment.
The Company preliminarily allocated the purchase price of the acquisition to identifiable assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date. The excess of the purchase price over the aggregate fair values was recorded as goodwill. The Company calculated the fair value of the assets acquired using the income, market or cost approach (or a combination thereof). Fair values of certain assets were determined based on Level 3 inputs including estimated future cash flows, discount rates, royalty rates, growth rates, sales projections, retention rates and terminal values, all of which require significant management judgment and are susceptible to change. The purchase price allocation was based upon preliminary information and is subject to change if additional information about the facts and circumstances that existed at the acquisition date becomes available. The Company is in the ongoing process of conducting a valuation of the assets acquired and
liabilities assumed related to the acquisition, including trade names and customer relationships, personal and real property, and deferred taxes. The final fair value of the net assets acquired may result in adjustments to these assets and liabilities, including goodwill. However, any subsequent measurement period adjustments are not expected to have a material impact on the Company's results of operations.
The preliminary purchase price allocation for the M&M Acquisition is as follows:
As of
November 1, 2022
(In $ millions)
Cash and cash equivalents462 
Trade receivables - third party and affiliates (Note 5)
484 
Inventories (Note 6)
1,078 
Current other assets311 
Property, plant and equipment, net (Note 8)
1,281 
Intangible assets (Note 9)
Customer-related intangible assets1,500 
Trade names1,400 
Developed technology550 
Goodwill (Note 9)(1)
5,788 
Other assets359 
Total fair value of assets acquired13,213 
Trade payables - third party and affiliates(458)
Current other liabilities (Note 10)
(339)
Deferred income taxes (Note 15)
(1,006)
Noncurrent operating lease liabilities (Note 16)
(159)
Other liabilities(77)
Total fair value of liabilities assumed(2,039)
Noncontrolling interests(125)
Net assets acquired11,049 
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(1)Goodwill consists of expected revenue and operating synergies resulting from the acquisition, a portion of which is expected to be deductible for income tax purposes.
The following unaudited pro forma financial information presents the consolidated results of operations as if the M&M acquisition had occurred at the beginning of 2021. M&M's pre-acquisition results have been added to the Company's historical results. The pro forma results contained in the table below include adjustments for (i) increased depreciation expense as a result of acquisition date fair value adjustments, (ii) amortization of acquired intangibles, (iii) interest expense and amortization of debt issuance costs of $366 million and $674 million related to borrowings under the Term Loan Facility and the issuance of Acquisition Notes as if these had taken place at the beginning of 2021 for the years ended December 31, 2022 and 2021, respectively and (iv) net total inventory step up of inventory amortized to Cost of sales of $66 million for the years ended December 31, 2022 and 2021.
These pro forma results have been prepared for comparative purposes only and are not necessarily indicative of the results of operations as they would have been had the acquisitions occurred on the assumed dates, nor are they necessarily an indication of future operating results.
Year Ended
December 31,
20222021
(In millions)
Unaudited Consolidated Pro Forma Results
Proforma Net sales
$12,614 $12,069 
Proforma Earnings (loss) from continuing operations before tax
888 1,843 
The amount of M&M Net sales and Earnings (loss) from continuing operations before tax consolidated by the Company since the acquisition date were $430 million and $(80) million, respectively.
During the year ended December 31, 2022, transaction related costs of $117 million were expensed as incurred to Selling, general and administrative expenses in the consolidated statements of operations.
Korea Engineering Plastics Co. Restructuring
On April 1, 2022, the Company completed the restructuring of Korea Engineering Plastics Co. ("KEPCO"), a joint venture owned 50% by the Company and 50% by Mitsubishi Gas Chemical Company, Inc. KEPCO was first formed in 1987 to manufacture and market polyoxymethylene ("POM") in Asia, with a particular focus on serving domestic demand in South Korea. KEPCO will now focus solely on manufacturing and supplying high quality products to its shareholders, who will independently market them globally. As part of the restructuring of KEPCO, the Company paid KEPCO $5 million and will pay 5 equal annual installments of €24 million on October 1 of each year beginning in 2022. This resulted in an increase to the Company's investment in KEPCO of $134 million. The Company's joint venture partner will be making similar payments to KEPCO. The restructuring did not result in a change in ownership percentage of KEPCO, nor a change in control, and KEPCO will continue to be accounted for as an equity method investment.
Plant Closures
•    Silao, Mexico
In September 2022, the Company announced that it will cease manufacturing operations at the Engineered Materials
compounding facility in Silao, Mexico by the end of 2022, with decommissioning taking place in 2023. Manufacturing operations formally ceased on December 16, 2022.
The exit and shutdown costs related to this closure are as follows:
Year Ended
December 31,
2022
(In $ millions)
Asset impairments(1)
(8)
Restructuring(1)
(1)
Accelerated amortization expense(10)
Plant/Office closure(1)
8 
Total(11)
______________________________
(1)Included in Other (charges) gains, net in the consolidated statements of operations (Note 24).