INEOS to acquire BASF’s 50% Styrolution stake for €1.1bn

LONDON (ICIS)–INEOS is to acquire an additional 50% stake in styrenics producer Styrolution from joint venture partner BASF for €1.1bn, the Switzerland-headquartered chemicals producer said on Monday.

Giving INEOS sole ownership of the business, the deal is expected to close in the fourth quarter of this year, the company said.

The purchase is subject to regulatory approval, with Styrolution to remain an independent company until completion of the deal, and to become a subsidiary of INEOS Industries Holding once the sale has received the green light.

“Styrolution has fulfilled its promise as a globally competitive business that competes effectively with large-scale producers from Asia and the Middle East,” said INEOS CEO Jim Ratcliffe.

“After the purchase, Styrolution will be run separately as a standalone company within INEOS, and continue to operate as it does today,” he added.

Styrolution was established in 2011 through the merger of BASF and INEOS’ global styrenics businesses, and is the world’s largest producer of styrene monomer, polystyrene and styrenic specialties.

A condition instated at the formation of the joint venture gave INEOS the right to buy BASF’s stake in the business from 1 February 2014. BASF also had an option to divest its stake from October 2014.

Speaking at a press conference in BASF’s Ludwigshafen, Germany headquarters in February, CEO Kurt Bock said the company was “a happy shareholder” in Styrolution and was in no hurry to divest, but the joint venture’s management had been publicly mulling options for a BASF exit since 2013.

A Styrolution spokesman told ICIS in August 2013 that the company was evaluating possible strategies for a BASF exit, including an initial public offering, or the acquisition of the stake by INEOS or a third party.

Headquartered in Frankfurt/Main, Styrolution’s earnings before interest, taxes, depreciation and amortisation (EBITDA) was €442m in 2013, a 32% increase from the previous year on the back of strong polystyrene margins and styrene monomer market performance.