HOUSTON (ICIS)--LyondellBasell approached Brazilian polyolefins producer Braskem about a possible takeover, the Wall Street Journal reported on Monday.
The talks are still in early stages, and there is no guarantee that any deal would go through, the Wall Street Journal reported.
LyondellBasell would not comment about the report, saying it is company policy not to discuss market speculation. Braskem also would not comment.
After the report, stock prices for both companies increased in US trading. Braskem shares rose by more than 11%, while LyondellBasell's US shares rose by more than 1%.
If the two companies were negotiating a deal, it would need to pass muster from Brazilian contractor Odebrecht and state energy producer Petrobras. The companies are Braskem's largest shareholders.
Odebrecht and Braskem are connected in other ways as well. The current CEO of Odebrecht, Luciano Guidolin, was previously an executive vice president of Braskem.
Petrobras had been making plans to sell its stake in Braskem before these were removed from its divestment programme by the Brazilian government.
However, LyondellBasell has no PE or PP capacity in Brazil, since Braskem is the sole producer of these resins in the country.
Similarly, Braskem produces mostly PP in Europe and the US and little PE. It recently started a plant in La Porte, Texas, which makes ultra-high-molecular-weight PE (UHMW-PE).
The company makes PE in Mexico through the Braskem Idesa joint venture.