Basell Holdings NV is acquiring Solvay Engineered Polymers, a major polypropylene compounder, for an undisclosed price.
The deal, expected to close early next year, ``will complement Basell's existing polymer-based composite materials and alloys business in North America,'' said Paul Yeates, president of Basell's advanced polyolefins business.
Solvay EP is based in Mansfield, Texas, and operates about 200 million pounds of PP compounding capacity at plants in Mansfield and Grand Prairie, Texas.
The company also runs an application development center in Auburn Hills, Mich., and makes specialty thermoplastic vulcanizate compounds at a site in Shirley, Mass.
Solvay EP's primary product is thermoplastic olefin-grade compounds for the automotive market. The business is a unit of Solvay Group, a major producer of plastics, chemicals and pharmaceuticals based in Brussels, Belgium.
Employee totals and annual sales totals for Solvay EP were unavailable.
In the news release, Solvay officials said the business generated less than 2 percent of Solvay's total sales. Based on 2006 totals, that would place Solvay EP's annual sales at less than $250 million.
Although no purchase price was disclosed, sources in the compounding market estimate the sale price at between $100 million and $150 million.
An industry contact said the deal might draw attention from government regulators because it would give Basell well over half of the North American TPO market. In an e-mail reply, a Basell spokesman said the firm ``doesn't anticipate any issues'' with the deal being approved.
The industry contact said Solvay's lack of full integration into PP resin may have led to the sale. He added that the deal could cause concern among makers of automotive bumpers, which would find themselves with a large volume of TPO material coming from a single supplier.
Basell - based in Hoofddorp, the Netherlands, with North American headquarters in Elkton, Md. - ranks as the world's largest PP maker, with more than 12 billion pounds of annual capacity. The firm also ranks as the world's largest PP compounder, with annual compounding capacity estimated at about 2 billion pounds.
Basell's major North American compounding site is in Jackson, Tenn., where it operates about 150 million pounds of annual capacity.
In the past two years, Basell has undergone major compounding expansions in Brazil and China.
In July, Basell announced it was acquiring plastics and chemicals maker Lyondell Chemical Co. of Houston for $19 billion. That pending deal will create a firm with annual sales of $34 billion and 15,000 employees worldwide.