LyondellBasell Shares Up After $2 Billion JV Deal With Sasol
October 02 2020 - 11:00AM
Dow Jones News
By Robb M. Stewart
LyondellBasell Industries' shares strengthened Friday after the
chemicals and refining company struck a deal to buy half of certain
Sasol Ltd. assets in Louisiana for $2 billion and form a joint
venture.
In morning trading, the shares were 3.8% higher at $70.73. They
are 25% lower year-to-date.
LyondellBasell said it signed a definitive agreement to buy 50%
of the South African company's ethane cracker, low and linear-low
density polyethylene plants and associated infrastructure. The deal
includes rights for each partner regarding the potential future
sale of its ownership interest.
Under the terms of the agreement, each joint-venture partner
will provide pro-rata shares of ethane feedstocks and will take
pro-rata shares of cracker and polyethylene products at cost.
LyondellBasell will operate the U.S. base chemicals assets on
behalf of the 50-50 joint venture.
Some of Sasol's U.S. employees will become employees of
LyondellBasell. Sasol will retain full ownership and operational
control of its Lake Charles Research and Development complex, Lake
Charles East Plant ethane cracker and U.S. Performance Chemicals
Business assets in Lake Charles, which produce Ziegler alcohols and
alumina, ethoxylates, Guerbet alcohols, paraffins, comonomers,
linear alkyl benzene, ethylene oxide and ethylene glycol
The assets of the venture, which will operate under the name
Louisiana Integrated PolyEthylene JV LLC, are located on the U.S.
Gulf Coast. LyondellBasell said its investment allows it to expand
in a core area of its business and it will realize immediate
returns and eliminate customary construction risks associated with
new projects.
Write to Robb M. Stewart at robb.stewart@wsj.com
(END) Dow Jones Newswires
October 02, 2020 10:45 ET (14:45 GMT)
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