Germany-based BASF and UK-based INEOS have signed a joint venture contract to form the company, which is still to be approved by the respective antitrust authorities.
Styrolution will be headquartered in Frankfurt/Main, Germany and will a 50/50 joint venture, although the contract specifies that BASF will receive cash consideration once the transaction is completed.
Forging a more competitive business
In the meantime, the two companies will continue to operate their businesses completely separately, until the final antitrust opinion is delivered.
“The joint venture agreement paves the way for a globally competitive business that will provide significant benefit to its customers,” said Jim Ratcliffe, chairman of INEOS.
“Styrolution will be capable of meeting the long-term needs of a rapidly changing market as it competes effectively with large-scale producers form Asia and The Middle East.”
Combining global business activities
The two companies are combining their global business activities in styrene production to make use of synergies that will improve production efficiencies for the material, which is used as a precursor for a number of packaging materials such as copolymers and polystyrene.
Styrolution’s activities will concentrate on the production of styrene used in styrene monomers, polystryrene, acrylonitrile butadiene styrene, styrene-butadiene block copolymers, as well as a range of other copolymers and copolymer blends.
The companies have stressed that both will retain their respective other businesses, which will not be affected by the joint venture.
Combining styrene production worldwide
BASF will combine its styrene monomers, polystyrene, acrylonitrile butadiene styrene and styrene-butadiene block copolymers in the venture from plants located in Germany, Belgium, Korea, India, and Mexico.
INEOS will combine production for acrylonitrile butadiene styrene at sites in Germany, Spain, India and Thailand in the venture, while also contributing its complete operations in styrene monomers and polystryrene.
The move is the second significant activitiy in the merger and acquisition area, following on from its acquisition of Cognis, which was completed in December 2010 at an estimated cost of €3bn.