BASF in talks to JV styrene - IPIC a good fit

BASF is in talks to joint venture its styrene business before exiting the market, Bloomberg reported last week. Abu Dhabi's IPIC (International Petroleum Investment Company) could be a strong contender for this transaction. I recently interviewed its managing director, Khadem Al Qubaisi, who told me he was close to a deal in Europe (pictured).

IPIC wants to expand its aromatics operations in the Chemaweyaat development and would be looking for technology to achieve that. It has a track record of acquiring companies for their technology, such as Austria's Borealis and Canada's Nova Chemicals.

Here is an excerpt from the Bloomberg article:

Nov. 26 (Bloomberg) -- BASF SE, the world’s biggest chemical company, is in talks to form a styrene joint venture as a prelude to exiting the market, a company official with knowledge of the situation said.

Negotiations are at early stages and may be prolonged by antitrust concerns, said the person, who declined to be identified as discussions are private. BASF is still pursuing a sale of styrenics generating 3 billion euros ($4.5 billion) in sales, and Middle Eastern and private equity buyers are the most likely candidates, the person said.

The talks signal BASF is willing to accept a compromise after failing to find a buyer for factories that make styrene, used in CD cases and televisions. An earlier attempt to sell the unit to Rotterdam-based LyondellBasell Industries fell through after the financial crisis and slumping demand forced the chemical maker to seek bankruptcy protection.

IPIC names Bayer MaterialScience on list of possible acquisitions

International Petroleum Investment Company (IPIC) is in talks with five major petrochemical players in the US and Europe, including Bayer MaterialScience, and expects to close a European acquisition by the first quarter of 2010, the managing director of the Abu Dhabi-based company said on Tuesday.

Khadem Al Qubaisi said technology from the new company would be used to develop petrochemical projects in Abu Dhabi. The purchase would also continue IPIC’s geographical expansion, he said.

“It’s a big deal. We’re looking to buy a very big petrochemical company in Europe. It’s in petrochemicals and specialities also. Bayer MaterialScience is one of the companies we’ve been talking to,” Al Qubaisi said. To read the full story click here.

I interviewed Al Qubaisi and was really impressed by his ambitious expansion plans for IPIC. Watch out Europe and the US, this company is on course to become a world leader in petrochemicals.

I also liked Al Qubaisi's interview style. He was very relaxed and spoke excellent English. I hope to keep in touch with IPIC and build much closer links to ICIS.







In Europe, IPIC already owns a 48% stake in Spanish energy and chemical group Cepsa, 64% of Austria-headquartered polyolefins group Borealis and a 19% stake in Austrian oil and chemical group OMV.

This year it acquired 100% of Canada’s NOVA Chemicals.

OMV to control Nova Chemicals

Austrian oil and chemicals group OMV is to intervene in the strategic planning and operation of Canada's Nova Chemical, following its acquisition earlier this year by Abu Dhabi’s International Petroleum Investment Co (IPIC).

IPIC is a partner with OMV in Austria-based plastics major Borealis and also holds a direct stake in OMV. NOVA was acquired in a $2.3bn (€1.5bn) deal .

According to ICIS news “The ongoing strategic analysis of NOVA's business revealed that IPIC needed to provide a higher degree of involvement in NOVA's operative business than originally envisaged,” OMV spokeswoman Michaela Huber told ICIS news.

The European Commission this week cleared an application by IPIC and OMV to share control of NOVA. IPIC hold a 19.6% stake in OMV. Borealis is jointly controlled by IPIC (64%) and OMV (36%).

OMV has been trying hard to expand its international reach. The failed acquisition of Hungary's MOL was a recent, long running attempt. IPIC is purely an investment vehicle but has been growing its chemical empire strongly.