Analysis: BP Amoco to sell styrenics?
16 July 1999 13:12 [Source: ICIS news]
LONDON (CNI)--BP Amoco is likely to include its styrenics business in its planned $2.5bn (Euro2.45bn) chemicals sell-off, according to oil and chemicals analysts canvassed by CNI on Friday.
Another possible disposal candidate is BP Amoco's solvents and antifreeze activities in The Netherlands and elsewhere, analysts said.
The newly merged oil and chemicals giant, which announced its disposal plans together with ambitious financial targets on Thursday, plans to divest its small, peripheral, low-growth chemicals businesses.
BP Amoco's styrenics business, which includes polystyrene (PS), has "no leading edge in terms of size and no particular technology edge", according to Jeremy Chantry, chemicals analyst at Credit Lyonnais Securities Europe.
BP Amoco's task of selling its PS activities will not be helped by the fact that Shell is also trying to sell its PS business as part of its planned sell-off of 40% of its chemicals portfolio, Chantry said.
Potential interest in the PS business could come from leaders in the sector Novo Chemicals Corp and BASF, said Steve Turner, oil analyst at HSBC, but their strong market positions might lead to anti-trust problems.
BP Amoco told analysts the products in which is has a "competitive advantage" are: purified terephthalic acid (PTA), paraxylene (PX), polypropylene (PP), acetic acid, acrylonitrile (ACN) and European oxygenated solvents. It also talked of its technological advantage in polyethylene (PE).
Bryan Sanderson, BP Amoco's chief executive for chemicals, said the split between former BP and former Amoco chemicals assets to be divested would be roughly 50:50, with slightly more assets coming from Amoco.
He said that following the disposal of BP Amoco's US-based Plaskon Electronic Materials business to the Cookson Group, also announced Thursday, the group has "pretty much" completed the disposals it is allowed to carry out this year under US Securities Exchange Commission (SEC) rules. The whole group is limited to divestment cap of about $1bn (Euro886m) in 1999, the first year of a two-year post-merger restriction.
By: Anna Williams
+44 208 652 3214
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