INEOS, a global petrochemicals manufacturer, has signed an agreement with LyondellBasell to acquire its Ethylene Oxide and Derivatives business for $700 million.
The deal includes LyondellBasell’s Bayport Underwood site in Texas. INEOS Oxide is Europe’s largest producer of ethylene and propylene-based chemicals. Ethylene oxide is used in large-scale chemical production around the world and is necessary for the production of pharmaceuticals, cosmetics, semiconductors, polyester, food packaging, construction materials, antifreeze, brake fluids, solvents, paints, soap and detergents.
"This transaction is evidence of our disciplined focus on value creation through the execution of a key pillar of our strategy -- growing and upgrading our core," Peter Vanacker, LyondellBasell CEO, said in a statement. "Successful execution of this strategic pillar involves making difficult decisions to divest businesses which are not part of our core.”
The Bayport Underwood site produces high-quality ethylene oxide and derivatives. Per terms of the deal, all current employees on the LyondellBasell Bayport Underwood site and some who work offsite, will transfer over to INEOS when the transaction closes.
The acquisition comes a year after INEOS made a long-term deal with Sempra Infrastructure to supply liquefied natural gas (LNG), with INEOS purchasing approximately 1.4 million metric tons of LNG per year for 20 years as part of the proposed first phase of the LNG project. They also penned a Phase 2 non-binding agreement for the potential purchase of an additional 200,000 metric tons of LNG per year.
The deal with LyondellBasell is expected to close in the second quarter of 2024 following completion of the planned maintenance at the facility, and subject to regulatory and other customary closing conditions.
INEOS began its ethylene oxide and derivatives business in 1998 when it acquired Ethylene Oxide at Zwijndrecht, Belgium. Ethylene has become a core product for INEOS and the chemicals sector.
"We are pleased to announce this strategic acquisition,” INEOS Oxide CEO Tobias Hannemann said. “INEOS is a leading producer in Europe and this significant step expands its ethylene oxide and derivatives business into the U.S., which is the world’s largest market. It also complements our existing Ethanolamines production facility in Plaquemine, Louisiana.”
