Styrenics Market BASF and Ineos Sign Joint Venture Contract for Styrenics
On May 27, 2011 BASF and Ineos signed a joint venture contract, which regulates the formation of the planned joint venture company Styrolution. The EU Commission has approved the formation subject to the requirement that the parties sell an ABS production site in Tarragona, Spain.
Frankfurt/Germany – BASF and Ineos plan to combine their global business activities in 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 into the new joint venture called Styrolution. The business with expandable polystyrene is not part of the transaction. BASF and Ineos will retain their respective businesses.
The company headquarters will be located in Frankfurt/Main, Germany. In the joint venture 50% of the shares will be owned by BASF and 50% by Ineos. BASF will receive cash consideration following the completion of the transaction.
Joint Venture to Be a Leader in the Global Styrenics Market
With Styrolution, BASF and Ineos want establish the leading company in the global styrenics market. Pro forma sales of the combined businesses were €6.4 billion in 2010.
BASF intends to contribute its SM, PS, ABS, SBC and styrene-based copolymers businesses in the joint venture. This includes production plants located in Germany (Ludwigshafen, Schwarzheide), Belgium (Antwerp), Korea (Ulsan), India (Dahej) and Mexico (Altamira). BASF employs approximately 1,460 people in its styrenics business and generated sales of about €3.9 billion in 2010.
Ineos intends to contribute ABS production plants at sites in Germany (Cologne), Spain (Tarragona), India (Vadodara) and Thailand (Map Ta Phut) to the joint venture. In addition Ineos will contribute its SM and PS businesses to the joint venture, which includes Ineos and Ineos Styrenics sites in Canada (Sarnia), the United States (Indian Orchard, Joliet, Decatur, Texas City, Bayport), Germany (Marl), France (Wingles) and Sweden (Trelleborg). Ineos employs approximately 2,200 people in its styrenics activities and generated sales of about €2.8 billion in 2010.
Remedy Relates to ABS Production Site in Spain
The EU Commission has recently given its approval for the formation of the joint venture subject to the requirement that the parties sell an ABS production site in Tarragona, Spain. This site accounted for less than 3% of Styrolution’s pro forma EBITDA for the year 2010. The formation of the new joint venture has already been approved by the U.S. Federal Trade Commission without any remedies.
BASF and Ineos will continue to operate as strictly independent companies until the completion of the deal, which is anticipated in 2011, subject to remaining approvals from antitrust authorities in other countries.