Chemical giants BASF SE and INEOS Industries Holdings Ltd. will combine their global business activities in styrene-based copolymers and copolymer blends in a new joint venture called Styrolution, the companies have announced.
The new enterprise will encompass styrene monomers (SM), polystyrene (PS), acrylonitrile butadiene styrene (ABS), styrene-butadiene block copolymers (SBC) and other styrene-based copolymers (SAN, AMSAN, ASA, MABS) as well as copolymer blends, according to the companies, who signed a letter of intent on Monday (Nov. 29).
The agreement, subject to the approval of antitrust authorities, is expected to be completed in 2011.
Germany-based BASF has previously announced that it will carve out its styrenics activities by the end of 2010 and transfer them into separate entities. The carve-out will continue as planned, BASF says. As of Jan. 1, 2011, the company’s styrenics activities will operate as a separate company called Styrolution.
UK-based INEOS says it will acquire the other 50% shareholding in its 50-50 styrenics joint venture, INEOS NOVA, from NOVA Chemicals. Upon completion of the proposed joint venture with BASF, INEOS will transfer these activities into the new Styrolution group.
Expandable polystyrene is not part of the transaction. BASF and INEOS will each retain their expandable polystyrene businesses. BASF’s SM/PS capacities in Ludwigshafen, Germany, used to produce foam, will also remain with BASF as will the SM/PS business of BASF-YPC Co. Ltd., in Nanjing, China.
Sales Projections, Leadership
The partners say Styrolution will have a global presence and will offer significant benefits to customers in the styrenics industry through enhanced efficiency, reduced costs and excellent service.
Based on figures for 2010, Styrolution is expected to generate annual sales of more than €5 billion (about $6.6 billion US). The company will be headquartered in Frankfurt/Main, Germany. BASF and INEOS will each hold half of the shares in the new venture. BASF will receive cash consideration following the completion of the transaction. The parties did not disclose any further financial details.
Roberto Gualdoni, 54, will be named CEO of Styrolution. Gualdoni started his career at BASF in 1987 and, in April, became president of its Styrenics division. Christoph de la Camp, 47, will become CFO of the new company. De la Camp began his career with BP p.l.c. in 1994 and joined INEOS in 2005. He is currently the CFO of INEOS NOVA.
‘Create a Leading Player’
“The formation of the joint venture Styrolution together with INEOS is a further important step in our active portfolio management,” said Dr. Martin Brudermüller, a member of BASF SE’s Board of Executive Directors.
“It is our plan to create a leading player in the global styrenics market in terms of efficiency, safety, customer service, product quality and competitiveness. … Both partners complement one another with regards to their product and technology portfolio and global footprint.”
Jim Ratcliffe, Chairman of INEOS Capital, said the joint venture would “deliver new opportunities for innovation and growth that will provide significant benefit to our customers.”
“The world-scale assets will secure a sustainable and competitive business that is capable of meeting the long-term needs of a rapidly changing market. This is consistent with our long-term styrenics strategy.”
Global Production Facilities
BASF will contribute its SM, PS, ABS, SBC and styrene-based copolymers businesses to the new venture. This includes production plants in Germany, Belgium, Korea, India and Mexico. BASF employs approximately 1,460 people in its styrenics business and is expected to generate sales of more than €3 billion (about $3.9 billion US) in 2010.
INEOS will contribute ABS production plants in Germany, Spain, India and Thailand to the joint venture. It will also contribute its SM and PS businesses, which include INEOS and INEOS NOVA sites in Canada, the United States, Germany, France and Sweden. INEOS employs about 2,200 people in its styrenics activities and is expected to generate sales of about €2 billion (about $2.6 billion US) in 2010.
BASF and INEOS will continue to operate as independent companies until the completion of the deal.
Styrene (SM), an intermediate product, is a colorless liquid that polymerizes easily.
Polystyrene (PS) is a thermoplastic resin used in many applications, such as disposable packaging, many electronic devices, large appliances such as refrigeration liners and house wares.
SBC (Styrene-Butadien-Blockcopolymer) is a transparent, impact-resistant thermoplastic resin that offers applications with high optical appearance. It is mostly used in food packaging applications and display packaging.
ABS (Acrylnitrile-Butadien-Styrene) is a thermoplastic resin, used primarily for aesthetic colorful parts requiring heat and impact resistance. It also has automotive applications.
Styrene based copolymers (SAN, AMSAN, ASA, MABS) and blends (ABS/PA, ASA/PA, ASA/PC) are thermoplastic resins mainly used in various technical applications.
About the Companies
BASF is the world’s leading chemical company, with a portfolio that ranges from chemicals, plastics and performance products to agricultural products, fine chemicals, and oil and gas.
INEOS is the world's third-largest chemicals group and a leading manufacturer of petrochemicals, specialty chemicals and oil products. The company comprises 15 businesses and a production network spanning 51 manufacturing facilities in 13 countries. INEOS Industries Holdings Limited is a wholly owned subsidiary of INEOS AG. INEOS Industries is not a part of INEOS Group Limited.