Basell acquires Huntsman, adds chemicals footprint

Polyolefins supplier Basell (Hoofddorp, Netherlands), world leader in polypropylene supply, has agreed to buy Huntsman (Salt Lake City, UT) for $25.25/share in cash, a 30%-plus premium to the firm’s share price. In total, the deal is worth about $9.6 billion including debt and, assuming all goes well, is expected to close by the end of the year.

The takeover was approved by both Huntsman’s and Basell’s boards but is still subject to antitrust authorities’ approval in both Europe and the U.S as well as the approval of Huntsman shareholders. The Huntsman family and private equity firm MatlinPatterson, who collectively control 57% of the company’s common stock, agreed to approve the transaction. Basell is part of equity investor Access Industries’ portfolio, which is controlled by billionaire Len Blavatnik.

The Huntsman purchase allows Basell to expand further around the globe and add polyurethanes (PUR) to its range of plastics. Huntsman has been on a selling spree in recent years, late last year selling its European commodity chemicals business, including a then-unfinished 400,000-tonnes/yr capacity low-density polyethylene (PE) plant at Wilton, England for $810 million to Saudi Arabian competitor Sabic (Riyadh). Most recently Huntsman signed a deal with a subsidiary of Koch Industries to sell its U.S. olefins and polymer manufacturing assets in Texas, Illinois, and Michigan for about $761 million [e-Weekly Feb. 23, 2007]. Huntsman has continued to expand in PUR, announcing a June 15 deal to take a majority share in a Saudi Arabian MDI-based PUR joint venture with Arabian Polyol Co. for a plant based at Dammam. In February, the company created a Russia-based joint venture, ZAO Huntsman-NMG, to manufacture and sell PUR products in Russia and the CIS countries.

Basell spokesperson Patricia Vangheluwe told MPW that there is little overlap in the companies polyolefin offerings so the deal, from Basell’s viewpoint, is a good fit. Last year both companies produced combined revenue of more than $26 billion. “This transaction enhances our position as a global industrial group with long term strategic assets in the chemicals industry,” said Len Blavatnik in a statement.

Separately, Basell and Huntsman have made recent headlines. According to various news reports, Basell/Access Industries were among those pursuing GE Plastics, which was acquired in May by Sabic. In May, Access Industries announced it had a forward contract to buy 8.3% of Lyondell Chemical Co. for $674 million from Occidental Petroleum Corp. Lyondell’s key plastics industry-related offerings include ethylene, PE, styrene and propylene.

In an interview published in Swiss financial newspaper Handelszeitung on June 20, just days before Basell’s acquisition plans were publicized, Huntsman CEO Peter Huntsman said his group might be interested in buying either parts or all of either Ciba or Clariant, a pair of well-known Swiss additive suppliers.—[email protected]