Millennium to Exit Equistar

30 August 1999 00:00  [Source: ICB Americas]

Lyondell Chemical Company has indicated to analysts in New York that it is in negotiations with Occidental Petroleum and Millennium Chemicals concerning Millennium's planned divestiture of its 29.5 percent stake in Equistar. Lyondell owns 41 percent of the JV, and Occidental owns 29.5 percent.

Merrill Lynch analyst John Roberts says that while Lyondell is clearly interested in purchasing Millennium's share, "the minimum $800 million asking price still appears to be an issue and an all-cash deal appears unlikely without additional divestments." He adds that for tax reasons, Millennium wants to sell its acetyls business along with its interest in Equistar.

ING Furman Selz analyst Paul Leming says Lyondell is also pursuing negotiations to sell a significant portion of assets gained from its acquisition of Arco Chemical. "We believe Lyondell is negotiating with Bayer to transfer Lyondell's isocyanate assets to Bayer--one of the leading global producers of isocyanates--and then link that combined isocyanate business with Lyondell's propylene oxide/polyol business," Mr. Leming says.

Sinopec Plans Massive IPO An initial public offering by China Petrochemical Corporation (Sinopec), which may occur by the end of 2000, is expected to raise $4 billion to $5 billion in the largest stock sale ever by a mainland Chinese company, according to published reports. The offering is planned as part of a restructuring effort to relieve debt.

Morgan Stanley Dean Witter & Co. has agreed to underwrite the offering. KPMG Peat Marwick has been appointed sponsor and global coordinator.

Sinopec and BASF are also expected to submit a joint feasibility study to the Chinese government for their 650,000-ton-per-year ethylene plant in Guangdong. The project is likely to win state approval by the end of the year, reports say.

Cytec Buys BIP's Amino Resins Cytec Industries has signed an agreement to acquire the amino coating resins business of BIP Ltd. for roughly £26.5 million ($42.4 million). After shedding the resins business, which posted pro forma sales of roughly $25 million in 1998, BIP will retain its manufacturing plant in Oldbury, UK, where it makes amino coating resins for Cytec on an ongoing basis. The company says that once the purchase is complete, it will streamline its operations and improve logistics by consolidating production.

Suez Gets Okay, Makes Buy Suez Lyonnaise des Eaux has received final approval from the European Commission for completing its acquisition of Nalco Chemical Company. The company says that discussions over the $4.1 billion cash deal are continuing with the US Federal Trade Commission.

Under the deal, Suez Lyonnaise will acquire all of Nalco's outstanding shares through a tender offer. The offer, initially expected to be completed by August 20, has been extended to September 9.

Suez has simultaneously announced its plans to acquire the remaining shares of United Water Resources Inc., the second largest water services company in the US. Suez already holds 30.1 percent of United's common shares and convertible stock, as well as preferred stock convertible into roughly 2.8 percent of the outstanding common stock. The all-cash transaction, in which United Water will become a wholly owned subsidiary of Suez while maintaining its corporate identity, is expected to close during the first half of 2000.

Rhodia to Up Latex Capacity Adding to its global latex capacity of more than 400,000 tons, Rhodia will increase production at its latex unit in Guturribay, Spain, by bringing on a new 25,000-ton styrene latex reactor early next year. The project will serve the paper, paint and textile markets. The company has been expanding its latex business for several years. It opened a plant in Brazil in 1994 and one in Germany in 1997. The company started up a facility in Indonesia in 1995 and doubled its capacity in 1998. Last year, the company also took full control of its Indonesian subsidiary, Indolatex.

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