27 September 2010 07:40 [Source: ICIS news]
SINGAPORE (ICIS)--Tri Polyta Indonesia (TPI), ?xml:namespace>
TPI announced over the weekend that it would acquire Chandra Asri in an all-share deal worth about $1.2bn ($888m). The company would issue 2.91bn new shares to Chandra Asri’s shareholders, with the deal expected to be completed in January 2011, TPI said in the note.
“This combination [of the two companies] would allow a stronger industry that would be better able to compete with regional petrochemical players that have already been integrated,” said TPI in Bahasa Indonesia.
TPI has polypropylene plants with a total capacity of 360,000 tonnes/year located at the Petrochemical Industrial Estate in Cilegon, Banten province.
TPI and Chandra Asri share a common shareholder in PT Barito Pacific. Barito owns 77.9% of Tri Polyta and 70% of Chandra Asri.
After the integration, Barito would own 71.6% stake in the combined company.
With the two companies’ facilities all located in Cilegon, efficiency in operational and logistical environment could be achieved, TPI said in the note.
The deal would also widen the distribution network of the two companies and expand their customer base, it added.
“This would create further diversification and sources of income. It would also lessen the companies’ dependence on certain customers,” TPI said.
The acquisition of Chandra Asri would allow the firm to avoid any price volatilities in acquiring propylene feedstock, TPI said.
Chandra Asri’s 600,000 tonne/year naphtha cracker in Cilegon is the only cracking facility in the country.
For the six months that ended 30 June 2010, Chandra Asri produced 648,000 tonnes of olefins and by-products at its integrated complex in Cilegon as well as 156,000 tonnes of polyethylene (PE) and 128,000 tonnes of styrene monomer (SM).
With the deal, Chandra Asri would be able to strengthen its PP product line, a segment with a high growth rate in
($1 = €0.74)
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