Chemicals Tie-Up Weighed -- WSJ
31 Outubro 2017 - 5:02AM
Dow Jones News
By Dana Mattioli and Dana Cimilluca
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 (October 31, 2017).
LyondellBasell Industries NV has made a takeover approach to
Braskem SA, according to people familiar with the matter, eyeing a
deal that could value the Brazilian petrochemical company at well
over $10 billion.
The talks are at an early stage, the people said, and there is
no guarantee there will be a deal.
Should there be one, it would be substantial: Braskem on Monday
had a market value of about 37 billion Brazilian reais ($11.4
billion) and nearly as much debt. LyondellBasell had a market value
of about $40 billion.
It would also be the second-largest Brazilian M&A deal,
according to Dealogic. There has only been one double-digit-billion
dollar deal in the country, according to the data provider's
records: a $43 billion acquisition of oil-and-gas assets by
Petrobras, announced in 2010.
LyondellBasell and Braskem operate in similar product lines but
different geographies. Products include polyethylene, which is used
in everyday items such as garbage bags and milk jugs. A deal would
also give LyondellBasell access to faster-growing Latin American
markets.
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 global
commodity markets tumbled in the global financial crisis. A little
more than a year after the merger, LyondellBasell filed for
bankruptcy.
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.
Braskem is co-owned by state oil firm Petroleo Brasileiro SA,
known as Petrobras, and construction firm Odebrecht SA, which owns
just over half of the voting shares. The company, which says it is
the biggest producer of polypropylene in the U.S., had sales of
55.5 billion reais last year.
Odebrecht said in a statement that it "continues to work on
alternatives that may add value to Braskem and its shareholders,
and reaffirms its intention to keep Braskem as one of the group's
investments."
The chemicals sector has been a hotbed of merger activity of
late. On Monday, Akzo Nobel NV and U.S. rival Axalta Coating
Systems Ltd. said they are in talks to join forces in a merger of
equals that would create a multibillion-dollar coating and paints
giant.
Earlier this year, Dow Chemical Co. and DuPont Co. completed
their roughly $60 billion merger, which they expect to follow with
a three-way breakup. Last year, industrial-gas giants Praxair Inc.
and Germany's Linde AG agreed to combine.
Write to Dana Mattioli at dana.mattioli@wsj.com and Dana
Cimilluca at dana.cimilluca@wsj.com
(END) Dow Jones Newswires
October 31, 2017 02:47 ET (06:47 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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