Royal Dutch/Shell Group will be the world's largest maker of polypropylene resin after acquiring the remaining 50 percent of Montell Polyolefins from partner Montedison SpA.
The $2 billion deal, announced Sept. 12, ends the Montell joint venture after only 21/2 years.
Montell will continue to operate as a separate business with existing management, according to officials at Royal Dutch/Shell, which is headquartered in London and The Hague, Netherlands.
Officials at Montedison of Milan, Italy, said the move was prompted by the company's diminishing presence in petrochemicals.
Montell also is a sizable player in PP licensing technology, with more than 45 licensees of its Spherpol process — placing Montell second only to Union Carbide's Unipol technology.
The company posted profit of $334 million on sales of $3.79 billion in 1996.
Peter Vogtlander will continue to serve as Montell's chief executive officer.
``This change will not noticeably affect Montell's day-to-day operation or its strategy,'' Vogtlander said in a prepared statement.
``In fact, it will open up new opportunities because of Shell's global position and its financial strength.''
Montedison's debt load also affected its decision, according to Shell spokeswoman Valerie Landuyt.
The sale will allow Montedison to reduce its debt from 7.92 billion lire ($4.58 million) to 2.86 billion lire ($1.65 million).
``It was perfect timing for both companies,'' Landuyt said. ``Shell is looking to grow its petrochemicals business and Montedison is in a difficult financial situation.''
The move is part of a major reorganization for Royal Dutch/ Shell, a process that also includes the pending acquisition of Montell's European polyethylene holdings by a Shell/BASF joint venture.
Shell Chemicals Ltd. will be formed Jan. 1 to oversee Shell's global chemicals businesses. Evert Hankes will serve as CEO of the new company, which will have offices in London, Houston and Singapore.
In a prepared statement, Hankes said the Montell buyout and the BASF joint venture ``underline ... a desire to move forward quickly to capture market share in areas with marked growth potential.''
Although Montedison's relations with Shell were ``marked by great mutual confidence in a climate of active cooperation,'' one Houston-based industry analyst saw things differently.
``Montell had lost a lot of money,'' said Balaji Singh, president of Chemical Market Resources Inc.
``Industry sales in polypropylene increased 12 percent and linear low density polyethylene increased 27 percent since Montell was founded, but Montell's sales only increased 10 percent in each of those areas. You can't do that and be a leader.''
Montell officials countered that the company had turned a profit, excluding noncash transactions and taxes, since its inception. The company also had reduced its debt from $2.1 billion to $1.6 billion and spent $360 million on capital improvements.
Singh added that the move may have been fueled by Montell's reticence to move into metallocene technology — a delay that allowed Exxon, Hoechst Celanese and BASF to pass Montell by — and by internal cultural differences between Montell's northern and southern European elements.
Montell's North American expansion plans — including an $83 million debottlenecking in Bayport, Texas, and a new, $33 million production line in Lake Charles, La. — will not be affected by the change in ownership.