MOSCOW (MRC) -- Haldia Petrochemicals (HPL), a flagship company of The Chatterjee Group (TCG), along with its international partner Rhone Capital has acquired US-based Lummus Technology at an enterprise value (EV) of USD2.725 billion (around Rs 20,590 crore) from McDermott International, reported Business Standard.
In the joint acquisition, HPL’s share is at 57 per cent, the balance would be held by Rhone Capital. Under the new dispensation, Lummus Technology would function as a ‘standalone’ autonomous entity. The deal was completed on Tuesday.
Lummus Technology is a master licensor of proprietary technologies in refining, petrochemicals, gas processing and coal gasification sectors, as well as a supplier of proprietary catalysts, equipment and related engineering services. It has about 130 licensed technologies and more than 3,400 patents and trademarks.
Purnendu Chatterjee, founder chairman of TCG, said, "Our investments are both strategic and long-term, most of which span across 25 to 30 years. We have primarily focused on knowledge-based enterprises, and Lummus is a great addition to our portfolio. Leading with innovation, it delivers sustainable value to clients in areas of materials technology." "HPL, being a long-term client of Lummus, can share its customer experience and collaborate with Lummus to co-create innovations for the benefit of the industry," Chatterjee added.
HPL is one of the largest petrochemical companies in India, having its manufacturing facility in Haldia, West Bengal. It has a total capacity of 700,000 TPA of ethylene. With the deal, Lummus and HPL together would be in a position to provide a ‘value proposition’ to the clients of Lummus in India and abroad. The divestment of Lummus is part of McDermott’s restructuring process.
Leon de Bruyn, head of Lummus Technology, said, "For our customers, employees and partners, this is an important milestone. We would be able to focus exclusively on providing world class technologies and solutions and developing long-term strategies that will allow Lummus to lead and shape the future of our industry."
Rajnish Kumar, chairman, State Bank of India (SBI), the lead banker in the deal, said, "Acquisition of Lummus, world’s premier petrochemicals company by Haldia Petrochemicals, is a landmark achievement by an Indian company. I hope this acquisition will go a long way in furthering India’s strong footprint in technology space and support India’s mission of Atmanirbhar Bharat."
As MRC informed earlier, in late March 2020, India's private-sector Haldia Petrochemicals (HPL) shut its naphtha cracker after ports in the country declared force majeure to prevent the spread of the coronavirus.
Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 595,170 tonnes in the first five month of 2020, up by 10% year on year. Deliveries of all ethylene polymers, except for linear low density polyethylene (LLDPE), rose partially because of an increase in capacity utilisation at ZapSibNeftekhim. At the same time, PP shipments to the Russian market was 457,930 tonnes in January-May 2020 (calculated by the formula production minus export plus import). Deliveris of exclusively PP random copolymer increased.
Haldia Petrochemicals Ltd is a modern naphtha based petrochemical complex at Haldia, West Bengal, India. Haldia has played the role of a catalyst in emergence of more than 500 downstream processing industries in West Bengal with a capacity to process more than 3,50,000 TPA of polymers, among which are PE and PP. Once identified by promoter dispute and poor financial health, HPL turned around from 2015. Founded by Purnendu Chatterjee in the mid-80s, the US-headquartered TCG now has a controlling stake in HPL. TCG owns and controls companies as ‘long-term investments’ in sectors like, petrochemicals, pharmaceuticals, biotech, financial services, real estate and technology, serving global markets.