LyondellBasell has also agreed to acquire a 50% stake in Sasol’s U.S. Base-Chemicals business in Lake Charles for $2bn
Dutch chemical company LyondellBasell and Sasol, an integrated energy and chemical company, have agreed to form a 50/50 joint venture (JV), known as Louisiana Integrated PolyEthylene JV.
As part of the deal, LyondellBasell will acquire a 50% stake in Sasol’s U.S. Base-Chemicals business in Lake Charles for $2bn.
It will purchase the 1.5 MM tonne ethane cracker, 0.9 MM tonne low and linear-low density polyethylene plants as well as the associated infrastructure.
The newly built assets of the JV are strategically situated on the U.S. Gulf Coast.
LyondellBasell said that its investment in the JV allows it to expand in a core area of its business and use the company’s operational and commercial strengths.
Through the investment, the company will realise immediate returns and avoid customary construction risks that are associated with the execution of the new project.
Sasol to retain ownership of Lake Charles Research and Development complex
Sasol will retain the full ownership of its Lake Charles Research and Development Complex, Lake Charles East Plant ethane cracker and U.S. Performance Chemicals Business assets in Lake Charles.
Upon closing of the deal, some Sasol US employees will be part of LyondellBasell.
Additionally, the U.S. Base Chemicals assets will be operated by LyondellBasell on behalf of the JV.
The deal will allow Sasol to achieve its financial and strategic objectives by reducing the net debt and shifting the company’s portfolio towards speciality chemicals.
Subject to customary regulatory approvals and approval by Sasol shareholders, the deal is estimated to be concluded by the end of the year.
Kirkland & Ellis is acting as legal counsel to LyondellBasell for the transaction, while Gordon Dyal & Co. and J.P. Morgan are acting as financial advisors.
Latham & Watkins is serving as legal counsel for Sasol for the transaction and Bank of America is acting as a financial advisor.
Recently, LyondellBasell announced the successful start of its small-scale MoReTec molecular recycling facility in Ferrara, Italy.