26 October 2010 06:06 [Source: ICIS news]
SINGAPORE (ICIS)--Indonesian business regulators have approved the merger between Chandra Asri and Tri Polyta Indonesia – on track for completion by 1 January 2011 – a source from one of the companies said on Tuesday.
“The deal could be completed as early as December, but we are looking at 1 January  as a more realistic target,” said the source.
The proposed merger, which would create a new $1.5bn (€1.08bn) company called Chandra Asri Petrochemical, was given approval from the Capital Market and Financial Institution Supervisory Agency (Bapepam-LK) on 21 October this year, according to a statement by Tri Polyta.
The country’s Commission for the Supervision of Business Competition (KPPU) also granted permission on 30 September for the merger to go through, the statement added.
However, a meeting on 30 September between the two sides revealed that the deal would involve vertical integration between the two companies and would not create a monopoly in the petrochemical sector, the statement said.
Through a stock swap mechanism, Tri Polyta set its share price at Indonesian rupiah (Rp) 3,579 ($0.40) while Chandra Asri’s was priced at Rp 152,664.53 per share.
The merger was expected to generate total sales of Rp17,000bn–20,000bn a year, according to Tri Polyta.
Meanwhile, a general meeting of shareholders was scheduled to be held on 27 October to determine the final outcome of the proposed merger, the source added.
Tri Polyta and Chandra Asri share a common shareholder in Barito Pacific, which owns 77.9% of Tri Polyta and 70% of Chandra Asri.
Tri Polyta operates a 360,000 tonne/year polypropylene (PP) plant at the Petrochemical Industrial Estate in Cilegon, Banten province, while Chandra Asri runs a 600,000 tonne/year naphtha cracker in Cilegon. The unit is the only cracking facility in Indonesia.
($1 = Rp8,905; €0.72)
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