LONDON: British oil monopoly BP Plc is selling its Chicago-based petrochemicals business Innovene to privately-owned British specialty chemicals company Ineos for $9 billion.
BP said it will return the net proceeds from the sale to share holders. The company had earlier mooted an IPO for Innovene, valuing it at around $6 to $7 billion. However, it decided against the move as several recent market placements had mixed results.
Ineos is expected to borrow from Barclays Capital, Merrill Lynch and Morgan Stanley to finance the deal, described by analysts as one of the world's biggest leveraged buyouts.
The deal will make Ineos one of the top four petrochemical companies in the world alongside Dow and Du Pont of the U.S. and BASF of Germany. It will command sales of $33 billion.
One another bidder for Innovene was rumoured to be the Indian petrochemicals firm Reliance Industries. However, the company had not confirmed its interest.
Ineos said the deal would be completed by the beginning of 2006, subject to U.S. and European regulatory approval.
Ineos came into being after a buyout of a former BP petrochemical unit in Antwerp led by chief executive Jim Ratcliffe. It had been buying propylene and ethylene from Innovene. The acquisition will bring Innovene's 19 manufacturing sites in Europe and North America to its fold adding to its own 46 facilities in 14 countries across the world.
The sale marks the exit of BP from olefin and derivatives business. The company had created Innovene in April 2004 by separating the chemical units from the rest of its business, hoping to take it public.
Ineos has some 7,500 workers and annual revenue of 5 billion euros, while Innovene employs 8,000 staff generating $18 billion of revenues a year.
Posted
on : Sun, 09 Oct 2005 18:35 GMT | Business News
By : Mike Lawson
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