… But Basell snaps up Lyondell Chemical

Chemistry and Industry, July 30, 2007 by Neil Eisberg

Polyolefins producer Basell is acquiring US chemicals producer and oil refiner Lyondell Chemical for $48/share, putting a value of around $19bn, including the assumption of debt, on the deal. The transaction, which has been approved by both boards, is expected to be closed within the next few months, subject to regulatory approval, and is not subject to financing. The $48 share price represents a 20% premium on Lyondell's closing share price on the day prior to the deal.

The merger will create one of the sector's largest companies, with Lyondell's three business sectors: ethylene, its coproducts and derivatives; propylene oxide and related products; and refining, complementing Basell's polyolefins business. Together, the companies would have had combined 2006 revenues of around $34bn.

Basell's ceo, Volker Trautz said: 'Lyondell's competitively positioned assets, access to raw material and refining capacity are excellent complements to Basell's diversified portfolio.' Len Blavatnik, chairman and founder of US private equity concern Access Industries, which owns Basell, added: 'The combination of Basell and Lyondell creates one of the top chemical companies in the world.'

* US petrochemicals subsidiary of Lyondell, Equistar is to spend $125m to address air, water and hazardous waste violations at seven plants in Texas, Illinois, Iowa and Louisiana following a settlement with the US EPA and Justice Department.