UpdateBraskem acquires Sunoco’s polypropylene business for $350m

01 February 2010 14:42  [Source: ICIS news]

Braskem acquires Quattor(Adds background and quotes from paragraph 6)

LONDON (ICIS news)--Braskem has acquired Sunoco’s polypropylene (PP) business for $350m (€252m), the Brazilian petrochemicals and plastics resins major said on Monday.

US-based Sunoco would receive $350m in return for the PP business of Sunoco Chemicals, on the basis that the deal closes within 60 days, Braskem said.

“The acquisition of Sunoco Chemicals provides Braskem with a solid and competitive platform for growth in the world’s biggest market, which will complement its ongoing internationalisation strategy through important greenfield projects under development in Mexico, Venezuela and Peru,” said Braskem’s CEO, Bernardo Gradin.

Included in the sale were Sunoco's polypropylene manufacturing facilities located at Marcus Hook in Pennsylvania; at La Porte in Texas; and at Neal in West Virginia, which produce approximately 950,000 tonnes/year of PP, and a technology and development centre at Pittsburgh.

Braskem expected to use the industrial and commercial base created by the deal for future acquisitions and to increase its presence in the US market.

Sunoco’s chairman and CEO, Lynn Elsenhans, said: "The sale of our polypropylene business demonstrates the company's continued progress in realigning our portfolio of assets and improving returns on invested capital. This transaction produces value for our shareholders by monetising a business that has not been able to meet its cost of capital and provides us with capital to redeploy for future growth in our areas of strategic focus."

Sunoco said in a separate statement on its website that it would be retaining its phenol and derivatives business, which has manufacturing assets at Philadelphia in Pennsylvania and at Haverhill in Ohio.

On 22 January, Braskem consolidated the petrochemical arms of Brazil’s Petrobras, Odebrecht and Quattor to make it the largest plastic resins producer in the Americas as part of a long-term plan to become one of the world’s five largest producers.

The acquisition of Sunoco's PP business, which ICIS news reported last week as a likely deal, was subject to regulatory approval and customary closing conditions, and was expected to close on or before 31 March 2010.

($1 = €0.72)

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