LyondellBasell to commence with smooth transition for both partners

31-Dec-07
In July, Basell decided to buy Lyondell's outstanding common shares for US$48 each in an all-cash transaction that, with debt assumed by Basell, was valued at about US$20 billion. Last month, Lyondell shareholders voted to approve the deal, and the transaction closed before year-end as scheduled. Dutch chemical and plastics maker Basell has completed its acquisition of Houston's Lyondell Chemical Co. LyondellBasell, the world's third-largest independent chemical firm, plans to focus on the smooth transaction to make this merger work. In addition to the challenge of blending the corporate cultures in Houston and in the Netherlands, the company will also have to manage the transition so as to have a minimum effect of customers. Basell, owned by billionaire industrialist Leonard Blavatnik's privately held Access Industries, is the world's largest producer of polypropylene and Europe's largest producer of polyethylene, both key ingredients in plastics. Before the merger, Lyondell was the fourth-largest U.S. chemical maker. It manufactures the propylene that Basell needs to make its biggest product, polypropylene resin. It also owns a large oil refinery in Houston, which it acquired last year after buying out partner Citgo Petroleum Corp.'s 41% stake in the plant. The refining business will help Basell offset down cycles in its chemical business and will give Basell a bigger foothold in North America, where its presence had been small. The alliance broadens the company's product lineup and gives it more opportunities to grow, particularly in fast-growing Asian and Middle Eastern markets. CUrrently, 55% of LyondellBasell's sales come from North America, 39% from Europe and the rest from other regions. But in 10 years, the emerging regions are expected to account for 20% of sales.
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