Rejected suitor proposes once again
Twice spurned: first, Dutch chemicals and plastics manufacturer Basell (and its parent Access Management) lost its bid ($11 billion) to acquire GE Plastics, edged out by Saudi Arabian company Sabic. Then it lost out on its bid ($10 billion) to buy US-based Huntsman to a bigger bid from Hexion Specialty Chemicals. It didn't bemoan its fate. It went out and made a new, even bigger deal in record time. It has announced it will buy US chemicals company Lyondell Chemical for $12.7 billion.
Lyondell, based on ARCO's chemical division, was spun off n 1989. Having since acquired a number of companies, most notably Equistar Chemicals, it is now the #4 chemicals manufacturer in the US. Among other products, it makes a key raw material, ethylene, for making polypropylene, Basell's biggest product, itself then processed to make fibers, packaging, and other products. Lyondell also makes propylene oxide used for making urethane foam, and owns a major oil refining division, once a joint venture with CITGO. It manufactures polypropylene, which is the most widely used plastic in the world. The combined companies would have over $34 billion in sales.
Of course, it's not over yet, though analysts don't see any chemicals rivals who might come up with the money to outbid Access/Basell, but some warn that oil companies might be interested.
With these three mergers, we can officially declare a buying frenzy in the chemicals/plastics industry. Bloomberg rates the Basell-Lyondell the third largest chemical industry deal ever, after Aventis's 1998 buyout of Hoechst AG ($21.2 billion) and Linde AG's 2006 acquisition of BOC Group Plc ($14.2 billion).
9:02:39 PM 
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