M&A

New Chemistry: Basell Buying Lyondell

After being snubbed by Huntsman, Basell owner Leonard Blavatnik will pay $19 billion for the third-largest independent U.S. chemical company.
Roy HarrisJuly 17, 2007

It didn’t take long for Dutch chemical company Basell Holdings NV to find another target after Huntsman Chemical Corp. snubbed it last week. Basell agreed to purchase Houston-based Lyondell Chemical Co. for about $19 billion, or $48 a share.

The transaction includes assumption of debt, although the parties did not say how much of the price reflects the debt being assumed.

The deal between Lyondell and Basell, which is part of Russian-born billionaire Leonard Blavatnik’s U.S.-based Access Industries, offers a 45 percent premium over the price of Lyondell in May. Back then, Access first expressed interest in Lyondell, although most public attention had focused on its $9.15-billion deal with Huntsman in June. That deal ended when Huntsman instead struck a $10.6-billion deal with Hexion Specialty Chemicals Inc., part of private-equity company Apollo Management L.P.

Blavatnik has been seeking acquisitions since Access bought Basell from BASF AG and Royal Dutch Shell two years ago. He said that combining Basell and Lyondell “further strengthens Access’ long-term strategic plan in the global petrochemical industry.” Its sectors are natural resources and chemicals, telecommunications and media, and real estate.

Lyondell is the third-largest public chemical company in the U.S., making chemicals and plastics, and refining heavy, high-sulfur crude oil and producing various fuel products.