Basell to Be Sold

BASF and Shell Chemicals have agreed to sell their Basell polyolefins joint venture to a consortium led by Access Industries together with the Chatterjee Group. The price will be $5.7 billion, including debt.

With annual sales of some $8.7 billion, Basell calls itself the world's largest producer of polypropylene, a major polyethylene maker, and a leader in licensing polyolefin processes. BASF and Shell formed Basell in 2000 to combine their respective polyolefin businesses. In mid-2004, the two chemical giants announced plans to exit the venture, either through a sale or a public offering of stock.

Although a number of industry and financial buyers expressed interest in acquiring Basell, published reports say the bidders in recent weeks had narrowed to two: the Access/Chatterjee consortium and Iran's state-owned National Petrochemical Co.

Last week, the Iranian news agency ISNA quoted NPC's managing director, Mohammad Reza Nematzadeh, as saying his company was the superior bidder but that U.S. government officials dissuaded BASF and Shell from selling to the Iranian firm. Basell operates U.S. facilities that could have been subject to U.S. sanctions against Iran.

Access Industries, a New York City-based holding company, was founded in 1986 by Len Blavatnik, a Russian-born executive who is said to have made a fortune in Russia's oil industry. Chatterjee is a U.S.-based investment firm run by Purnendu Chatterjee. It has significant holdings in India, including a controlling interest in Haldia Petrochemicals, a large Indian chemical company that uses Basell technology in some of its polymer facilities.