Chemical Industry Merger In Works -- WSJ
18 Giugno 2018 - 9:02AM
Dow Jones News
By Dana Mattioli and Luciana Magalhaes
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (June 18, 2018).
Chemical companies LyondellBasell Industries NV and Braskem SA
said Friday that they have entered into exclusive talks regarding a
potential merger.
In October, The Wall Street Journal reported that Lyondell had
made a takeover approach to Braskem, a petrochemical giant and that
the sides were in preliminary talks. The talks have been complex
given Braskem's ownership structure.
Braskem, which has a market capitalization of $8.7 billion, is
co-owned by Brazilian state oil firm Petróleo Brasileiro SA, known
as Petrobras, and construction firm Odebrecht SA. According to the
company, Odebrecht controls 50.1% of the voting shares, while
Petrobras controls 47%. The company says it is the biggest producer
of polypropylene in the U.S.
Braskem's shares rose 21.4% on the news.
LyondellBasell has been negotiating with Odebrecht to buy
Braskem, but until now had not been allowed to perform due
diligence, which is often a precursor to a merger agreement,
according to people familiar with the matter. On Friday, the two
companies said they would begin the process of due diligence,
negotiating definitive agreements and obtaining corporate
approvals.
Still, the companies said the talks were preliminary. When the
Journal reported on the talks in October, Odebrecht had indicated
it wanted to keep Braskem in its portfolio.
The process could take a few months, according to a person
familiar with the matter, and there is no guarantee there will be a
deal.
LyondellBasell is a Netherlands-based chemicals-and-polymer
producer with a big presence in Houston. It was formed in 2007 when
Dutch chemical company Basell International Holdings BV paid $12.7
billion to buy Houston-based Lyondell Chemical Co. The deal loaded
the company with more than $20 billion in debt just before
commodity markets tumbled in the global financial crisis. A little
more than a year after the merger, LyondellBasell filed for
bankruptcy. As of Thursday, the company had a market value of about
$45 billion.
It emerged from bankruptcy in 2010 after eliminating about $5
billion in debt. Ukrainian-born billionaire Len Blavatnik's holding
company, Access Industries, is a significant backer. Recently,
executives of the chemical company have indicated they have a big
M&A appetite.
Austen Hufford contributed to this article
Write to Dana Mattioli at dana.mattioli@wsj.com and Luciana
Magalhaes at Luciana.Magalhaes@wsj.com
(END) Dow Jones Newswires
June 18, 2018 02:47 ET (06:47 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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