Basell Polyolefins to buy Huntsman

Our Corporate Bureau
27 June 2007

Basell will pay Huntsman shareholders $25.25 per share, a whopping 34 per cent more than the Monday, 25 June closing price of $18.90 on the New York Stock Exchange. The acquisition, which requires US and European Union regulators' approvals, is expected to be completed in the fourth quarter of 2007.

As a combined entity Basell and Huntsman would have 2006 revenues of over $26 billion and about 20,900 employees. Benefits to Basell: economies of scale in the supply chain and synergies in marketing across a larger geography.

Basell is owned by Russian-born billionaire Leonard Blavatnik's Access Industries, which is based in New York. Blavatnik bought Basell for $5.2 billion from BASF and Royal Dutch Shell in 2005.

Basell is the world's leader in polypropylene and advanced polyolefin products, a leading supplier of polyethylene and catalysts, and a global leader in the development and licensing of polypropylene and polyethylene processes. Together with its joint ventures, Basell has manufacturing plants across the world and sells products in more than 120 countries. It has research and development activities in Europe, North America and the Asia-Pacific region.

Troubled times
The Huntsman-Basell agreement will end a five-year investment by New York-based MatlinPatterson, which bought debt in Huntsman for about $500 million when Huntsman was close to bankruptcy in 2002 and then converted the holding into a controlling stake. In 2003, MatlinPatterson paid around $200 million for a bolt-on acquisition of Belgian polymers maker Vantico Group SA. Huntsman made a $1.6 billion IPO in February 2005.