07 October 2009 23:25 [Source: ICIS news]
SAO PAULO (ICIS news)--A merger between Brazil’s giant petrochemical firms Braskem and Quattor could be announced soon, Braskem said on Wednesday.
Braskem and, Quattor have been in talks regarding strategic alliances and a possible merger.
Brazil’s newspaper Folha de S Paulo had reported that the companies could announce a possible deal in late October or early November.
However, Braskem said it has not committed to a date for signing a deal, which could take place following a decision related to a lawsuit filed by Joanita Soares de Sampaio Geyer, a member of the family that controls UNIPAR.
UNIPAR holds a 60% stake in Quattor, while Petrobras controls the other 40%. Petrobras also controls 30% of Braskem
The new petrochemical company would reach annual net revenues of Brazilian reais (R)26bn ($15bn, €10bn), according to media reports.
The possible merger, however, is already causing debate.
“I think the merger is bad for buyers, especially if Brazil decides to keep commercial barriers in place … it could lead to a monopoly effect,” said Walter de Vitto, an analyst for the consulting firm Tendencias Consultoria.
Vitto said the deal could reduce competition in the sector and consequently lead to resin price increases.
“We depend on expensive feedstock such as naphtha, while costs are high - so companies will tend to hold commercial barriers in place,” Vitto said.
Petrobras is expected to hold a minor, but important stake in the new company, according to reports.
($1 = R1.76)
($1 = €0.68)
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