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BP unloads petrochemicals wing Innovene for $9 billion
LONDON/FRANKFURT - Private British chemicals company INEOS today confirmed that it was buying out BP's Innovene petrochemicals business in a deal worth $9 billion.
Oil giant BP will return the proceeds of the sale to shareholders. The company was initially readying itself to launch an IPO for Innovene petrochemicals, but these plans were shelved as soon as a potential bidder was found. INEOS would be financing this deal by borrowing an equivalent amount from Barclays Capital, Merrill Lynch and Morgan Stanley.
The left over cash from the €9.9 billion ($12 billion) loan would be used by Ineos to refinance its existing debt. Commenting on the deal, BP Chief Executive John Browne said in a statement, "Innovene has proved to be a very attractive business to its peers in the chemicals sector. This deal is the very best of a number of good offers. Consistent with existing BP practice, we remain committed to returning excess free cash flow, including the net proceeds of this sale, to shareholders,"
The deal was kept under wraps and even the top men were unaware of the deal, "The management were not part of the process. They were told a week ago," said an Ineos spokesman. Chicago-based Innovene has a work force of about 8,000 in North America and Europe with yearly revenues pegged at £10.2 billion.
BP chief executive Ralph Alexander and Mark Tomkins, chief financial officer would retain their positions at least until the deal is formalized in February subject to U.S. and European regulatory approval. Commenting on their expectations from the deal, Jim Ratcliffe, INEOS chief executive said in a statement, "This is a transformational acquisition elevating INEOS to the world's fourth largest independent petrochemicals company."
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Written
by :
Archibald Freeman | Published on :
08:27:00
EST
Sun, 09 Oct 2005 |
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