Financial Daily from THE HINDU group of publications
Friday, May 06, 2005
Financial Daily from THE HINDU group of publications Friday, May 06, 2005 |
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Corporate
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Mergers & Acquisitions Chatterjee Group, Access acquire Basell for $5.7 b Our Bureau
Kolkata , May 5 MR Purnendu Chatterjee of The Chatterjee Group (TCG), along with a few partners, has succeeded in acquiring the assets and debts of the $8.4-billion Dutch petrochemical major, Basell NV, for euro 4.4 billion ($5.7 billion). Though TCG, along with the US-based Access Industries Inc (owned by the Russian born oil billionaire Leonard Blavatnik), emerged as the sole contender after outbidding 43 others over the last few days, the formal announcement was made only on Thursday at the Basell headquarters in Amsterdam. The TCG-Access led consortium was strongly challenged by Iran's National Petrochemical Company, which was finally sidelined owing to pressure applied by the US State Department. Iran is already on the American sanction list and the US law prevents US firms from dealing with Iranian governmental agencies. Basell, which was a 50:50 joint venture between Germany's BASF AG and Royal Dutch/Shell Group, was set up in 2000. It has over 6,600 employees, including two Nobel laureates on its staff. The company has 23 manufacturing units worldwide and its products are available in more than 120 countries. Basell's biggest strength is its catalyst business, which generates more than 20 per cent of its revenue. In 2003, its turnover was $8.4 billion. In July 2004, BASF and Shell decided to exit from this organisation. It was announced that the sale agreement was likely to be closed by the second half of 2005. Apart from TCG and Access Industries, the New York-based equity fund, Blackstone Group, Haldia Petrochemicals Ltd and a few others might also participate in the acquisition process. Senior executives of BASF and Shell Chemicals have explained why they are coming out of this "low-margin commodity plastics" business. Mr Blavatnik, in his statement, said that Basell was an "attractively positioned global business" and has an "excellent future". The sheer size of the acquisition price, approximately Rs 25,000 crore, makes the deal the biggest ever acquisition by any Indian corporate body. It surpasses ONGC Videsh's $1.7-billion purchase of 20 per cent stake in the Sakhaklin oilfield, the Reliance Group's buyout of FLAG Telecom and the Tata acquisition of Tetley and NatSteel. Though sources in TCG said that raising funds for the acquisition was not a difficult proposition, the funding equation remains unclear. It was learnt that Mr Chatterjee is open to roping in other partners, including private equity funds. ICICI Venture Funds, sources said, could also participate in the deal.
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