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Topics Materials, Mergers & Acquisitions, Joint Venture, Materials Suppliers, K 2013
Companies & Associations Solvay SA
LYNDHURST, ENGLAND — Chemicals giants Ineos Group and Solvay SA have announced their intention to enter into a 50-50 joint venture which, the companies said will create a PVC business with an annual sales of about 4.3 billion euros ($5.63 billion).
An Ineos spokesman said the company did not have a time-frame for when the deal might get the go-ahead or any conditions, such as sell-offs, that might be imposed.
If the deal is approved, the two firms' combined European chlorvinyls operations would be among the top three worldwide producers, the pair said in a statement.
"This agreement will result in the creation of a truly competitive and sustainable business that will provide significant benefit to customers such as reliable access to PVC," said Jim Ratcliffe, Ineos' chairman.
"The newly combined business, which will be of world scale, will be able to better respond to rapidly changing European markets and to match increasing competition from global producers."
Jean-Pierre Clamadieu, Solvay's chief executive, said the joint venture would improve the competitiveness of its operations in a very challenging environment regarding feedstock and energy costs in Europe.
"We are convinced that this is the right project to secure, for the long term, the development of Solvay's European chlorvinyls activities, of its employees and its plants.
"Furthermore, this transaction would substantially change our portfolio of activities and allow us to accelerate Solvay's transformation into a chemical group focused on growth and high-margin businesses."
If the venture goes ahead, Solvay would contribute its vinyl activities — part of Solvin, itself a 75/25 venture between Solvay and BASF SE — as well as its Chlor Chemicals business, spread across seven integrated production sites in Europe.
The company said these sites included five electrolysis units "converted into more energy efficient membrane technology, which supports sustainable production of PVC".
Kerling, an Ineos subsidiary and the largest PVC producer in Europe, would contribute its chlorvinyls and related businesses, including three modern and large-scale membrane electrolysis units, based on 10 sites in seven European countries.
Ineos is based in Lyndhurst, England, while Solvay is headquartered in Brussels.
This story is from Plastics News sister publication Plastics & Rubber Weekly.