A Russian/Indian alliance has trumped Iran in a $5.7 billion deal for Basell NV, the world's largest polypropylene maker.
The consortium that bought Basell from BASF AG and Royal Dutch/Shell Group was led by a pair of New York investment firms - Access Industries Inc. and Chatterjee Group. Access, owned by Russian billionaire Leonard Blavatnik, has major industrial holdings in that country and other parts of Europe. Chatterjee has similar ties to Indian markets, including a majority stake in polyolefins maker Haldia Petrochemicals Ltd., which licenses Basell technology.
In a May 5 news release, Blavatnik said his firm is ``experienced in industrial investments in companies that compete in large, cyclical markets.'' A recent Forbes magazine ranking placed Blavatnik among the world's 300 wealthiest people, with a personal net worth of $2.4 billion.
Access will hold the largest ownership stake in Basell, but in a May 5 phone interview, Access spokesman Peter Thoren declined to provide details on how ownership will be split. Access holds 50 percent stakes in companies that rank among Russia's largest oil and aluminum firms, but has no plastics-related holdings, Thoren said. The firm also is involved in telecommunications and other industries.
``We're an industrial holding company with long-term strategic buyers,'' Thoren said. ``The fact that this is our first plastics investment is more of a vote of confidence for Basell.''
Thoren said Access has no plans to change Basell's management team, which he described as ``one of the keys to the business.''
Basell - with 2004 sales of $8.7 billion and 6,600 employees - controls almost 18 billion pounds of annual PP capacity, as well as 5 billion pounds of capacity for polyethylene. The firm's Spheripol technology is the world's most widely licensed method of PP production. London-based Shell and BASF of Ludwigshafen, Germany, had placed Basell on the selling block in July, citing a desire to exit cyclical, commoditylike businesses. The two firms formed Basell in 2000 by combining Shell's Montell Polyolefins unit with BASF's Targor business.
For several months, Iran National Petrochemical Co., a state-owned plastics and chemical maker, had a strong interest in Basell, but industry sources said the U.S. trade embargo against Iran was a stumbling block in negotiations. Basell - based in Hoofddorp, the Netherlands - generates about 20 percent of its sales from North America.