BANGKOK -- Thailand's Indorama Ventures, the world's largest maker of the resin known as PET, has agreed to buy a joint venture between U.S. group Dow DuPont and Japan's Teijin.
The target business, DuPont Teijin Films, makes high-end polyethylene terephthalate films used for solar panels and medical equipment. Indorama sees the move as a way to raise its profile in high-value-added operations.
The purchase price has not been disclosed.
The acquisition will include eight production facilities in the U.S., Europe and China, along with a research and development center in the U.K., according to stock exchange filings on Tuesday. The sites in question are currently run by four companies; Indorama's subsidiary in the Netherlands is to acquire 100% of all four by early 2018.
Indorama's share price on Wednesday climbed 1.1% from the previous day's close, outpacing the broader SET index's 0.4% rise.
DuPont Teijin produces biaxially oriented PET and polyethylene naphthalate films, as well as polymers, with total annual capacity of 277,000 tons. It controls the largest share of the global market for solar and medical films.
Indorama makes films in the U.S. but is more focused on low-cost products, such as food packaging. In a statement, chief executive Aloke Lohia described the deal as "a new chapter" for the company, as it will be "the next step in creating a leading position for customer solutions in films."
DuPont Teijin boasts a strong track record in research and development, with over 700 patents. This "makes it a strategic fit with our own innovation capabilities," the CEO added.
This is the latest in a string of deals Indorama has signed in recent years. The group has snapped up polyester-related businesses from global giants that are increasingly divesting noncore operations to cope with stiffer global cost competition. Last year, the Thai company acquired a U.S. petrochemical plant from BP.
"Many companies are leaving this industry and we are seeing more and more acquisition opportunities," Indorama spokesman Richard Jones told the Nikkei Asian Review.
The company touts its polyester value chain integration, which covers everything from raw materials like PET and fibers to products such as plastic bottles and tire cords. This setup gives the company a cost edge, Jones said.