The owner of polypropylene giant Basell Polyolefins might be taking aim at Lyondell Chemical Co. - but the firm appears to be losing out on its bid for GE Plastics.
Access Industries Inc., which bought Basell for almost $6 billion in 2005, has entered into an option agreement with investment firm Merrill Lynch International that would allow Access to buy an 8.3 percent stake in Lyondell for almost $675 million. The stake, representing more than 20 million shares of Houston-based Lyondell, is being sold by Occidental Petroleum Corp. of Los Angeles.
In a May 11 Securities and Exchange Commission filing, officials with Access - doing business as AI Chemical Investments LLC - said that if the Lyondell option is exercised, Access may consider buying Lyondell outright or merging its operations with those of Basell.
Lyondell reported sales of $22.2 billion and profit of $735 million in 2006. The firm's Equistar Chemicals LP venture is North America's second-largest producer of high and low density polyethylene and the region's fourth-largest maker of linear LDPE.
Officials with either Basell or Lyondell could not be reached for comment.
In a May 11 note to investors, stock analyst Kevin McCarthy said he believes the stock transaction ``puts Lyondell in play.''
``Any combination would be a good strategic fit,'' wrote McCarthy, an analyst with Banc of America Securities in New York. ``Lyondell is long [on] propylene monomer, which is the key building block for polypropylene, Basell's largest product.''
Access - a New York-based financial company owned by Russian-born billionaire Len Blavatnik - also had been cited in published reports as one of three finalists trying to acquire GE Plastics, the engineering resins producer that was put on the block earlier this year by General Electric Co.
But The Wall Street Journal and Bloomberg LP's news service each reported May 18 that the winning bidder was petrochemicals maker Saudi Basic Industries Corp. of Riyadh, Saudi Arabia. Sabic is reported to have bid $11 billion for the unit.