BP sells petchem unit to Ineos for $5B

British giants BP and Ineos announced on Monday a $5 billion global petrochemical deal, covering 14 manufacturing plants across Europe, Asia, and the U.S., Kallanish Energy reports.

BP’s departing chief financial officer Brian Gilvary stroke the sale of BP’s petrochemical unit to Ineos – an achievement that concludes BP’s $15 billion divestment target a year ahead of schedule.

Under the terms of the agreement, Ineos will pay BP a $400 million deposit and $3.6 billion on completion – which is expected by year-end. The remaining $1 billion will be paid in installments by the end of June 2021.

The assets include the whole of BP’s aromatic and acetyls businesses, with the exception of petrochemical assets at Gelsenkirchen and Mulheim in Germany. These are “highly integrated” with BP’s Gelsenkirchen refinery and aren’t included in the sale, the energy major said.

“Strategically, the overlap with the rest of BP is limited and it would take considerable capital for us to grow these businesses,” explained BP’s CEO Bernard Looney. “Today’s agreement is another deliberate step in building a BP that can compete and succeed through the energy transition.”

Ineos said in a separate statement the deal is a “good fit” with its existing asset base, enabling it to reintegrate the Hull site in the UK and expand the Ineos’ footprint at Geel, Belgium.

“This acquisition is a logical development of our existing petrochemicals business extending our interest in acetyls and adding a world-leading aromatics business supporting the global polyester industry,” added Ineos’ chairman Jim Ratcliffe.

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