Access Industries Closes Basell Buy

Less than three months after the original agreement was signed, Access Industries has completed its purchase of the Basell polyolefins joint venture from BASF and Shell Chemicals for $5.4 billion.

Access is an equity investment firm founded and led by Ukrainian-born, U.S.-educated financier Len Blavatnik. It has invested in industries such as oil, coal, aluminum, telecommunications, media, and real estate.

Access says the deal is the largest leveraged buyout the chemical industry has ever seen and the largest acquisition in the industry in the past five years. “I see opportunities to enhance competitiveness, operational efficiency, and financial performance,” Bravatnik said upon completion of the deal.

The Chatterjee Group, which controls India’s Haldia Petrochemicals, a Basell polypropylene technology licensee, wanted to participate in the deal but was unable to put up the needed equity.

Basell generated profits of about $175 million on sales of $8.2 billion in 2004. It is the world’s largest polypropylene maker, with 7.8 million tons of annual capacity, and the largest polyethylene producer in Europe. It is also a world leader in polypropylene licensing; 40% of installed capacity worldwide uses Basell technologies such as Spheripol.

Formed in 2000 through the merger of Shell’s Montell unit with BASF’s Targor polyolefins business, Basell lost money in two of its first three years of operation. “Basell is much stronger today compared to when the company was formed,” says Volker Trautz, the firm’s CEO. “Despite the difficult first years of operation, Basell has already demonstrated success in reducing debt.”