27 July 2011 19:52 [Source: ICIS news]
HOUSTON (ICIS)--Braskem is buying Dow Chemical's global polypropylene (PP) business, the Brazil-based company said on Wednesday.
Earlier in the day, Dow said it was selling the business to an unnamed strategic buyer for $340m (€235m).
Braskem said the purchase would make it the leading PP producer in North America.
Included in the sale are two PP plants in the US and two in Germany, with a total capacity of more than 1m tonnes/year, Braskem said.
The plants in the US are in Texas at Freeport and Seadrift, and will increase Braskem's PP capacity in the region by 50% to 1.4m tonnes/year.
The two plants in Germany, at the petrochemical complexes of Wesseling and Schkopau, have a capacity of 544,000 tonnes/year.
"The acquisition of Dow's assets consolidates our leadership in polypropylene in the US, the largest thermoplastic resins market, and it also enhances our current position in Europe, an important market for our biopolymers strategy," said Braskem CEO Carlos Fadigas.
"In addition, as our second acquisition in the US, this transaction will enable Braskem to capture approximately $140m in synergies [net present value] through a more diversified portfolio, a more leveraged fixed cost base and working capital, logistics and supply optimisation," he added.
The transaction is expected to close by the third quarter 2011 pending regulatory approvals.
($1 = €0.69)
For more on Dow and Braskem visit ICIS company intelligence
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