BASF and LetterOne sign agreement to merge Wintershall and DEA

MOSCOW (MRC) -- BASF and LetterOne signed a definitive transaction agreement to merge their respective oil and gas businesses in a joint venture, which will operate under the name Wintershall DEA, BASF and LetterOne said.

Closing of the transaction is expected in the first half of 2019, subject to approvals of merger control and foreign investment authorities as well as mining authorities and the German Federal Network Agency. Until closing, Wintershall and DEA will continue to operate as independent companies.

In 2017, the combined business of Wintershall and DEA had pro-forma sales of EUR4.7 billion, income from operations before depreciation and amortization (EBITDA) of EUR2.8 billion and net income of EUR740 million. In 2017, pro-forma hydrocarbon production of Wintershall and DEA totaled 210 million barrels of oil equivalent (BOE); this equals a production of around 575,000 BOE per day. The joint venture will have a regionally more balanced footprint with growth opportunities in the core regions and strives for a daily production of 750,000 to 800,000 BOE between 2021 and 2023. Through the merger, synergies of at least EUR200 million per year are expected as of the third year following the closing of the transaction.

To effect the merger, LetterOne will contribute all its shares in DEA Deutsche Erdol AG into Wintershall Holding GmbH against the issuance of new shares of the company to LetterOne. Wintershall will then be renamed Wintershall DEA, which will be headquartered in Kassel and Hamburg. BASF will initially hold 67% and LetterOne 33% of Wintershall DEA’s ordinary shares reflecting the value of the respective exploration and production businesses of Wintershall and DEA. To reflect the value of Wintershall’s gas transportation business, BASF will receive additional preference shares. No later than 36 months after closing but in all cases before an IPO, these preference shares will be converted into ordinary shares of the company Wintershall DEA. This will result in a total shareholding of BASF in Wintershall DEA of 72.7%.

The oil and gas business of BASF is bundled in the Wintershall Group consisting of Wintershall Holding GmbH and its subsidiaries, including the gas transportation business. The oil and gas business of LetterOne comprises DEA Deutsche Erdol AG and its subsidiaries.

DEA is operating in the field of exploration and production of crude oil and natural gas and is headquartered in Hamburg, Germany. The company has long-standing experience along the entire value chain of the upstream business. With its workforce of around 1,150 employees, DEA has stakes in production facilities and concessions in Germany, Norway, Denmark, Egypt, Algeria and Mexico.

Wintershall, headquartered in Kassel, Germany, focuses on exploration and production in oil and gas-rich regions in Europe, Russia, South America, North Africa, and the Middle East. Together with Gazprom, Wintershall is also active in the transportation of natural gas in Europe. The company has about 2,000 employees worldwide and is Germany’s largest, internationally active oil and natural gas producer.
MRC

MOSCOW (MRC) -- Borealis, a leading provider of innovative solutions in the fields of polyolefins, base chemicals and fertilizers, announced today that Markku Korvenranta, Borealis EVP Base Chemicals, will step down from his role, said the company.

"We would like to thank Markku for the outstanding work, commitment and leadership during his years at Borealis. Markku has made significant contributions to the successful growth journey of Borealis and we wish him good luck for his future," commented Alfred Stern, CEO of Borealis.

"After spending 28 successful years at Borealis and after having been EVP Base Chemicals and a member of the Executive Board since September 2010, I have decided it is time to pursue other career opportunities," said Markku Korvenranta.

Markku Korvenranta will leave Borealis on 30 September 2018.

As MRC informed earlier, Borealis and United Chemical Company LLP (UCC) have signed a Joint Development Agreement (JDA) for the development of a world-scale polyethylene project, integrated with an ethane cracker, in the Republic of Kazakhstan.

Borealis is a leading provider of innovative solutions in the fields of polyolefins, base chemicals and fertilizers. With its head office in Vienna, Austria, the company currently has around 6,600 employees and operates in over 120 countries. Borealis generated EUR 7.5 billion in sales revenue and a net profit of EUR 1,095 million in 2017. Mubadala, through its holding company, owns 64% of the company, with the remaining 36% belonging to Austria-based OMV, an integrated, international oil and gas company. Borealis provides services and products to customers around the world in collaboration with Borouge, a joint venture with the Abu Dhabi National Oil Company (ADNOC).
MRC

MOSCOW (MRC) -- Al Waha Petrochemicals, a subsidiary of Sahara Petrochemicals, was in plans to shut a polypropylene (PP) plant for a maintenance turnaround, as per Apic-online.

A Polymerupdate source in Saudi Arabia informed that the plant was likely to be take off-line in end-September, 2018. It is slated to remain under maintenance for around two weeks.

Located in Jubail, Saudi Arabia, the plant has a production capacity of 450,000 mt/year.

Sadara Chemical Company is a USD20 billion joint venture that was developed by Saudi Aramco and The Dow Chemical Company. The more than 3 million metric tons of performance-focused products from the Sadara complex will add new value chains to the Kingdom’s vast petroleum reserves, resulting in the diversification of the economy and region.
MRC

MOSCOW (MRC) -- Kazanorgsintez (part of TAIF Group) has shut down its high density polyethylene (HDPE) production for a scheduled turnaround, according to ICIS-MRC Price report.

Kazanorgsintez began a gradual shutdown of production capacities for the scheduled maintenance last week and had completely shut its HDPE production by 26 September. The outage will be short and will last for about two weeks, the resumption of polyethylene (PE) production is planned from 11 October.

Kazanorgsintez's annual HDPE production capacity is 540,000 tonnes.

It is also worth noting that Stavrolen, Russia's second largest HDPE manufacturer, plans to take off-stream its production for a 10-day turnaround on 1 October. The plant's annual production capacity is 300,000 tonnes.

PJSC "Kazanorgsintez" is one of the largest producers of polyethylene and PE pipes in Russia and the only national polycarbonate (PC) manufacturer. The company's facilities produce more than 170 types of chemical products with a combined tonnage of over 1.3 million tonnes.
MRC

MOSCOW (MRC) -- AkzoNobel Specialty Chemicals has completed its acquisition of Brazil’s Polinox, South America’s leading producer of ketone peroxides, an essential ingredient in the manufacture of polymers, as per the copany's press release.

The purchase expands the company’s footprint in South America, establishing it as one of the region’s leading producers of curing systems for polyester thermoset resins.

AkzoNobel Specialty Chemicals acquires Polinox’s brands and trademarks, including Brasnox, Perbenzox and TecnoxSuper, as well as its customer list and production knowhow. Manufacture of those products will move to the company’s plant at Itupeva, Brazil, which is currently being expanded, by the third quarter of 2019.

"We signed an agreement to acquire Polinox in July and are fully prepared for a swift integration," said Johan Landfors, Executive Committee Member responsible for Polymer Chemistry. “We now look forward to serving Polinox’s impressive portfolio of customers and further accelerating our growth in this important region."

Roberto Pontifex, Managing Director of Polinox, will join AkzoNobel Specialty Chemicals as Commercial Manager. “I’m looking forward to continuing to serve my customers, and I am confident that we can strengthen our relationships with the knowhow AkzoNobel has to offer," said Pontifex.

In August 2018, AkzoNobel opened a new coatings production facility in Kenya.

Akzo Nobel N.V., trading as AkzoNobel, is a Dutch multinational, active in the fields of decorative paints, performance coatings and specialty chemicals. Headquartered in Amsterdam, the company has activities in more than 80 countries, and employs approximately 55,000 people.
MRC