14 October 2005
14 October 2005
BP is to sell Innovene, its olefins, derivatives and refining group, to UK-based INEOS, with the sale expected to be concluded early in 2006.
The $9 billion cash sale, subject to regulatory approvals, includes all Innovene's manufacturing sites, markets and technologies.
""Innovene has proved to be a very attractive business to its peers in the chemicals sector,"" said Lord Browne, BP Group Chief Executive. ""This deal is the very best of a number of good offers. I'm delighted with the outcome which is excellent for BP's shareholders and for Innovene's future.""
BP first announced the intention of separating its olefins and derivatives business from its petrochemicals portfolio in April 2004 with an initial public offering (IPO) as one, possible, disposal option. In the interim, it received a number of approaches from companies considering a trade sale leading to this decision instead of the IPO.
Browne said that the decision to sell Innovene in its entirety removed any uncertainty around market conditions at the time of an IPO, as well as would-be investors' concerns about BP's remaining stake and future intentions.
""Consistent with existing BP practice, we remain committed to returning excess free cash flow, including the net proceeds of this sale, to shareholders,"" he added.
""This is a transformational acquisition elevating INEOS to the world's fourth largest independent petrochemicals company,"" said Jim Ratcliffe, INEOS Chief Executive. ""INEOS and Innovene share a BP heritage of high quality people, assets and technology and are highly complementary businesses.""
Innovene is the 100 per cent BP-owned group created in April 2005. It has 8,000 staff, manufacturing facilities in seven countries in North America and Europe; $18 billion revenues in 2004; $13 billion of gross assets; $9.9 billion of net assets; pre-tax profits (Jan-Jun 2005) of $0.7 billion; 18 million tonnes of annual petrochemicals capacity and 412,000 barrels per day of crude oil refining capacity.
Innovene's chief executive is Ralph Alexander and its chief financial officer is Mark Tomkins. Innovene manufactures olefins and related products which are the raw materials for plastics, packaging and textiles industries; and operates two refineries in Europe.