Chevron Phillips Chemical's rumored bid for Nova Chemicals Corp. could have a major impact on North American polyethylene resin markets.
Reuters reported June 20 that CP Chem, based in the Woodlands, Texas, was bidding more than $15 billion for Nova of Calgary, Alberta. Nova officials declined to comment on the story. Officials with CP Chem could not be reached for comment.
The story quoted unnamed sources who said that Nova owner Mubadala Investment Co. of Abu Dhabi has been exploring a sale since early 2019. They added that there's "no certainty" that state-owned Mubadala will accept the CP Chem offer.
Market analyst Phil Karig said that, with all of the attention given to new shale gas driven PE capacity expansions, it's sometimes easy to forget that adding large amounts of existing capacity through acquisitions "can quickly alter the competitive landscape."
"Other PE suppliers looking to leapfrog the competition will certainly have an interest in Nova," said Karig, managing director of Mathelin Bay Associates LLC in St. Louis. "Which is why it would not be surprising if bids from other strategic buyers quickly emerge or if purely financial buyers looking to make an investment in the sector also step forward."