Aramco Overseas Company, a subsidiary of Saudi Aramco, has announced a joint venture with German specialty chemicals company LANXESS to create a new company for the development, production, marketing, sale and distribution of synthetic rubber used in the global tire industry, auto-parts manufacturing and a wide range of other applications.

The 50:50 agreement will see LANXESS contribute its existing synthetic rubber businesses to the joint venture. Highly successful in their own right, these businesses generated approximately EUR3 billion ($3.3 billion) in revenues last year.

LANXESS employs 3,700 workers and has 20 production sites and four global research centers in nine countries across Europe, Asia and the Americas.

Aramco Overseas Company, which will establish its stake in the new joint venture company via a share subscription, brings financial stability, additional scale and resources, continued investment in technology, plus “unrivaled” opportunities to integrate with petrochemical facilities, as well as cost-competitive access to reliable feedstock supplies.

The deal will help the firm scale up its global presence and create sustainable opportunities in Saudi Arabia, as well as worldwide, said Amin H. Nasser, president and CEO of Saudi Aramco.

“This is yet another major step forward in Saudi Aramco’s globally-integrated downstream expansion strategy. It will further enhance our competitive position in integrating our diverse portfolio,” he commented.

LANXESS CEO Matthias Zachert said the agreement offers the firm greater stability and R&D focus. “Unrivaled access to feedstock … will give the new joint venture the opportunity of long-term and sustainable growth that also benefits our expanding global customer base.”