Mexican PVC and specialty chemicals maker Mexichem SAB de CV has offered to acquire PVC resins producer Polycid SA de CV and plastic tube maker Plasticos Rex SA de CV from Mexican chemical company Cydsa SAB de CV, according to Cydsa.
``Both parties have started negotiations with a view to reaching an agreement,'' Cydsa said in an April 22 filing with the Mexican Stock Exchange.
However, in a separate filing with the Mexican bourse, Mexichem said it has reached an agreement with Cydsa and is waiting for the appropriate authorities to approve the deal.
Cydsa, headquartered in Garza García, Mexico, said Mexichem has proposed that Cydsa exchange Polycid and Plasticos Rex for a Mexichem caustic soda and chlorine plant in Mexico. As part of the deal, Cydsa also would receive a still-to-be-determined cash payment.
The caustic soda and chlorine plant is in Santa Clara, Mexico.
Polycid and Plasticos Rex have plants in the petrochemicals port of Altamíra, Monterrey, Poncitlan, Merida, Los Mochis and in the state of Mexico.
``If this agreement were approved, it would permit the PVC productive chain in Mexico to maintain its competitiveness with other companies in North America, despite being at a disadvantage in terms of integration and size,'' Mexichem said in its filing.
``For Mexichem, it represents an opportunity to confront the competition through operational efficiencies and synergies that will give long-term viability to this chain.''
The proposed transaction is part of Mexico City-based Mexichem's ambitious expansion strategy in Latin America. Enrique Ortega, the company's investment relations director, has said Mexichem plans to invest $1 billion in the region in the next few years.
