HOUSTON (ICIS)--Braskem has signed an agreement to acquire vinyls and chlor-alkali producer Solvay Indupa from Solvay for $290m (€212m), the Brazil-based chemical major said on Tuesday.
The deal establishes an industrial base in Argentina for Braskem, a country in which the company has had a commercial presence for more than 20 years.
Moreover, it will increase Braskem's PVC capacity to 1.25m tonnes/year, the company said. Braskem's caustic soda capacity will rise to 890,000 tonnes/year.
"The vinyls market is a strategic one for our business," said Braskem president Carlos Fadigas. "Braskem recently invested close to reais 1bn [$429m] in a PVC plant in Alagoas that was inaugurated in 2012, intending to meet the strong growth in demand for this resin, associated with the expansion of infrastructure in Brazil."
Under the agreement, Braskem will acquire the 70.59% stake that Solvay owns in Solvay Indupa.
“This divestment is part of Solvay’s strategic portfolio management. It will reduce the group’s exposure to the economic cycle and to energy-intensive businesses, allowing Solvay to achieve higher growth, higher returns and lower capital intensity,” said Jacques Van Rijckevorsel, a member of Solvay's executive committee.
Closing on the acquisition will depend on approval from Brazil's anti-monopoly commission (CADE), Braskem said.
With the conclusion of the deal, Braskem will launch a public offering to the minority shareholders to buy the shares of Solvay Indupa on the Buenos Aires Stock Exchange.
($1 = €0.73, $1 = R2.33)