INEOS buys Hydro’s polymers unit for $911m

21 May 2007 08:51  [Source: ICIS news]

HydroSINGAPORE (ICIS news)--INEOS Capital on Monday said it will acquire Norsk Hydro’s polymers business for Norwegian kroner (Nkr) 5.5bn (€673.2m/$910.6m), ending speculation that talks have stalled.

The acquisition of Hydro’s polymers activities, recently renamed Kerling, will allow INEOS to progress its growth strategy in Europe, the UK-based chemicals company said.

Norway’s Hydro said on 6 December 2006 that it was considering a public listing or divestment of the polymers business, as part of its strategy to divest non-core assets.

Following this agreement, Hydro will discontinue the process of listing Kerling on the Oslo Stock Exchange.

The acquisition is being made by INEOS Capital and standalone financing for the acquisition has been fully committed by Barclays Capital and Merrill Lynch.

The transaction, which is conditional on approval from the EU competition authorities, is expected to close in the third quarter 2007.

INEOS will benefit from an enhanced position across its chloralkali, polymer and compounds businesses, as well as acquire a 50% share in the Noretyl ethylene cracker at Rafnes, Norway, which is a joint venture with Austria’s Borealis, INEOS said.

Kerling is a wholly-owned subsidiary of Norsk Hydro, consisting of 1,200 staff and produces suspension and emulsion polyvinyl chloride (PVC) and chlorine/caustic soda in Norway, Sweden and the UK.

The business also has interests in joint ventures in Norway, Qatar and China and a share holding in the Portuguese PVC Producer CIRES, which is listed on Euronext in Lisbon.

“Hydro’s polymers business has a very good strategic fit with the INEOS portfolio. Its people, assets and technology will provide a significant opportunity for continued growth in this area”, said INEOS’s CEO Jim Ratcliffe.

“We believe this solution will contribute to a continued strong development of the polymers business,” said Hydro president and CEO Eivind Reiten.

($1 = Nkr6.04 / €1 = NKr8.17)

By: Jeanne Lim
+65 6780 4359

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