Braskem Will Acquire Sunoco's Polypropylene Business

Just days after striking a deal to take control of its largest local rival, the Brazilian chemical maker Braskem has agreed to acquire Sunoco's polypropylene business. The purchase, for about $350 million in cash, will mark Braskem's entry into U.S. chemical production.

Sunoco operates polypropylene plants in La Porte, Texas; Marcus Hook, Pa.; and Neal, W. Va. Their combined annual production capacity is 950,000 tons, about 13% of installed U.S. polypropylene capacity, by Braskem's estimate. The deal also includes a technology and development center in Pittsburgh.

Braskem CEO Bernardo Gradin says the purchase will complement the firm's "ongoing internationalization strategy through important greenfield projects in Mexico, Venezuela, and Peru."

The purchase also complements the planned buy of a majority stake in Quattor, another large Brazilian chemical maker, for $400 million plus the assumption of some $4 billion in debt. That deal will combine Brazil's only makers of polypropylene and polyethylene to create the largest manufacturer of basic plastics in the Americas. Braskem says its aim is to become one of the five largest petrochemical companies worldwide.

Sunoco, for its part, has been trying to sell its chemical business since late 2008. At the time, CEO Lynn L. Elsenhans told analysts that the business was not reaching the company’s target for returns. Sunoco became a major chemical producer in 2000 when it acquired Aristech Chemical from Mitsubishi Corp.

Sunoco says it will retain its business in phenol and phenol derivatives such as bisphenol A. With plants in Philadelphia and Haverhill, Ohio, the business is North America's largest phenol producer.