Braskem, Petrobras, Petroquisa, Odebrecht ink Investment Agreement

Braskem SA, Odebrecht SA (Odebrecht Servicos e Participacoes SA), Petroleo Brasileiro SA (Petrobras) and Petrobras Quimica SA (Petroquisa) have inked an Investment Agreement to regulate the terms and conditions under which Odebrecht and Petrobras will consolidate their interests in Brazil's petrochemical sector by consolidating at Braskem the equity interests they hold in the sector. The Investment Agreement establishes that the Transaction will be carried out in the following stages: (i) the creation of a holding company, BRK Investimentos Petroquímicos S.A. ("BRK"), which will hold 100% of Braskem common stock that is currently held by Odebrecht and Petrobras; (ii) capital injections at BRK, to be paid in cash by Odebrecht and Petrobras; (iii) a capital increase at Braskem through a private subscription by its shareholders; (iv) the acquisition by Braskem of the stock in Quattor held by Unipar; (v) the acquisition by Braskem of 100% of the stock in Unipar Comercial e Distribuidora S.A. (“Unipar Comercial”) and 33.3% of the stock in Polibutenos S.A. Indústrias Químicas (“Polibutenos”); (vi) the merger by Braskem of Petrobras stake at Quattor; and (vii) the stock tender offer for the indirect sale of the controlling interest in Quattor Petroquímica S.A. ("Quattor Petroquímica"), a subsidiary of Quattor. The consolidation of the petrochemical interests held directly and indirectly by Odebrecht and Petrobras at Braskem, combined with Braskem’s capital increase and the backward integration of its activities, and the subsequent acquisition by Braskem of the interest held by Unipar in Quattor, is aimed at strengthening Brazil's petrochemical industry and Braskem's cash position, assuring long-term investments to accompany the expected economic growth in the coming years. The Transaction also envisages the potential synergy and scale gains required for enabling Braskem to become a major player in the global petrochemical industry, while also helping to improve the performance of Brazil's trade balance. In addition to enabling greater competition in the international petrochemical and plastics chain, this strategic move and the associated developments permit the creation of jobs in the petrochemical industry, especially in the plastics sector, leading to even higher investments in research and development. For Braskem, the leader in Latin America in the production and sale of thermoplastic resins, the Transaction represents an important step towards strengthening its international expansion and is in line with its strategic plan to become one of the five largest and most competitive petrochemical companies in the world. The Transaction is also in line with Petrobras' strategic plan to operate on an integrated basis with its other businesses, thereby adding value to its products and allowing for a more effective participation at Braskem. The Transaction will also benefit its activities in the petrochemical sector due to the larger scale and a capital structure that is better suited to the challenges presented by global competition
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