Issue Date: May 28, 2007
Polyvinyl Chloride Deal
Ineos has reached an agreement to buy the Norwegian polyvinyl chloride resin maker Kerling from its parent Norsk Hydro for $913 million. The deal furthers consolidation in the PVC industry, which consultants say has long had too many players.
The acquisition will cement U.K.-based Ineos' position as the number one Western European maker of PVC, a versatile plastic used to make building siding, sewer pipes, credit cards, clothing, and flooring. Expected to close by the end of September, the deal widens Ineos' lead over its nearest competitor, Solvin, a joint venture of BASF and Solvay, according to Mary Blackburn, senior consultant with Chemical Market Associates.
Norsk Hydro initially planned to sell shares in Kerling to the public so it could focus on aluminum and power production. Instead, the deal with Ineos will add Kerling, with annual sales of about $1.1 billion, to the PVC-related assets that Ineos obtained in 2001 with the purchase of European Vinyls and ICI's chlorine chemicals business. Consultants say competition authorities are unlikely to stop the deal.
Kerling brings with it chlor-alkali, PVC, and PVC compounds businesses in Norway, Sweden, and the U.K. It also brings interests in PVC assets in Norway, Portugal, Qatar, and China, as well as a 50% partnership in the Noretyl ethylene joint venture in Norway with polyolefins maker Borealis.
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