Braskem gets new takeover offer

The Brazilian petrochemical maker Braskem has received a takeover offer from a much smaller domestic rival, Unipar Carbocloro. The polyvinyl chloride producer has proposed buying a controlling interest in Braskem in a deal that would value the company at about $8.6 billion.

The Brazilian conglomerate Novonor, which owns 38.3% of Braskem and controls the company, has been trying to sell its stake in Braskem for several years. In 2020, Braskem held unfruitful merger discussions with the US petrochemical maker LyondellBasell Industries. Then in May of this year, Novonor received a purchase offer from Abu Dhabi National Oil Company (ADNOC) and the private equity firm Apollo Global Management that valued Braskem at about $7.6 billion.

Unipar’s proposal values Novonor’s stake at $3.3 billion. Under the deal, Novonor would retain a 4% interest in the company.

Braskem, which produces petrochemicals, polyethylene, polypropylene, and polyvinyl chloride (PVC), had sales of $18.7 billion in 2022. Unipar’s sales were less than a tenth of that.

Unipar once had a controlling interest in Quattor, a short-lived rival to Braskem. Each firm controlled two petrochemical complexes in Brazil. Unipar sold its 60% stake in Quattor to Braskem in 2010, giving Braskem nearly full control of the Brazilian petrochemical sector.

The Unipar overture is more likely to yield a deal than the ADNOC-Apollo offer, says Jorge O. Bühler-Vidal, director of Polyolefins Consulting. “The advantage they have is that they are a Brazilian company,” he says. The government and the government-owned energy company Petrobras, a minority shareholder in Braskem, are more likely to go along with a Unipar transaction than one involving foreign firms, he says.

“It is a logical match because they are in pretty much the same business,” Bühler-Vidal adds. He says the deal could be approved by antitrust regulators despite the commanding market share Unipar would have in PVC. He notes that the Quattor deal made Braskem the sole producer of polyethylene and polypropylene in Brazil.