New chemicals giant
Dutch-based chemical company Basell Holdings BV announced it will buy US-based Huntsman Industries, in a $9.6 billion deal (including debt assumption). The purchase will effectively double Basell's size, making Basell one of the biggest plastics producers in the world, with joint revenues of over $26 billion, almost within reach of US-based Du Pont.
Basell main products are polypropylene (it's #1 in the world) and polyethylene (#1 in Europe). Those two products are key ingredients in moist plastic manufacture. It is also strong in polyolefins, other key plastics ingredients.
Huntsman, founded in 1970, is family controlled, make polyolefins, surfactants, polyurethanes, and other plastics-related products. The company has a long history of acquisitions and deacquistions, building a position in every continent. It started out making Styrofoam packaging for McDonalds, and over the years has built a global reach with dozens of acquisitions. . In the last few years it has been getting rid of its more generalized chemical holdings. In 2006, for example, it sold its European commodity chemicals division of Saudi company Sabic. In 2007, it sold its Australian resins business.
The history of Basell is a curious one. Founded in 2000 as a joint deal between chemicals giant BASF and petroleum giant Royal Dutch Shell, the company was bought out in 2005 by Russian billionaire Leonard Blavatnik, through his Access Industries equity group. Basell bid against the very same Sabic in bidding for General Electric's plastics division (an $11 billion deal).
These two deals by Basell and Sabic are part of a major restructuring of the chemical, especially the plastics chemical, industry. In each case, global presence is critical. In each case, private equity is in the lead. Just recently, privately held UK chemical giant Ineos Group bought the polymer division of Norway's Norsk Hydro for $900 million. In the chemical industry, the biggest players are jockeying for position and the top ten companies now control approaching 79% of the whole market. Basell has just eneterd the club.
10:03:33 PM 
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