Updates with details of the transaction.
Global petrochemical producer LyondellBasell is buying a 50pc stake in some of South African petrochemical firm Sasol's US assets for $2bn.
The two companies are setting up a 50:50 joint venture that will operate under the name Louisiana Integrated PolyEthylene JV. The venture will give Lyondell a 50pc stake in three of Sasol's plants in Lake Charles, Louisiana, including a newly built 1.5mn t/yr ethane cracker, a 470,000 t/yr linear low density polyethylene (LLDPE) plant and a 420,000 t/yr low density polyethylene (LDPE) plant, as well as associated infrastructure. Lyondell will take full operational and marketing control of the three assets within the joint venture.
While today's agreement does not lay out a concrete plan, Lyondell executives said there is the possibility Lyondell could take full equity ownership of the three assets at some point in the future. The two parties are targeting the end of 2020 to get customary approvals and close the deal.
Lyondell said the acquisition will give it $50mn in cost synergies over the next few years, and 17mn t of olefins and 16mn t of polyolefins capacity. The company estimates the purchase will add 300,000 t/yr of ethylene length, bringing the company's global total ethylene production to 800,000 t/yr. With the purchase the company said it has no plans for adding more derivative units until the mid-to-late 2020s.
The stake sale will help Sasol reduce its long-term debt, which stood at 189.7bn rand ($11.2bn) at the end of June. Sasol said it will retain full ownership and operational control of its Lake Charles Research and Development complex, Lake Charles East Plant ethane cracker and US Performance Chemicals Business assets in Lake Charles.
