HOECHST
Letter of intent to sell "Hostalen" to BASF-Shell jv / Elenac pushes to the top of the European PE market / 1.9m t/y of capacity
Hoechst's (D-65926 Frankfurt) sell-offs of its plastics activities reached a temporary peak in mid July with the group's announcement that it had signed a letter of intent to sell its 500,000 t/y, DEM 858m high density PE portfolio to the BASF-Shell joint venture Elenac (F-67088 Strasbourg Cedex 1). Talks with BP Chemicals (HQ: Britannic House,1 Finsbury Circus, GB-London EC2M 7BA) had been "on again, off again" but BP is believed to have been more interested in a joint venture than buying the business. A closing is envisaged for late 1998. BASF and Hoechst already are partners in the Targor (Rheinstr. 4, D-55116 Mainz) PP joint venture. Ticona (Lyoner Str. 38, D-60528 Frankfurt) is now the last plastics producer in the Hoechst group. A flotation for it along with petrochemical producer Celanese is planned.
If cartel authorities approve, Hoechst will transfer production facilities of its PE spin-off Hostalen Polyethylen GmbH in Germany and Spain to Elenac and push that company, set up at the beginning of 1998, towards the top among European PE producers. The addition of Hoechst's output to that of BASF, Shell and Montell, the former joint venture between Shell and Montedison, would give Elenac nearly 2m t/y of capacity and DEM 4 bn in annual sales of HDPE and LDPE. In the same category are Borealis and Polimeri Europa.
The Hoechst-Elenac deal lends weight to speculation that it may have been a contingency plan all along. Some observers have suggested that the EU's prolonged approval process for Elenac may have examined the repercussions of an even bigger merger. Based at Strasbourg and Kehl, the company currently employs 2,500 and has annual sales of some DEM 3 bn. Production sites are Ludwigshafen and Wesseling in Germany, Berre and Fos in France, and Carrington in the UK. It also owns 50% of CIPEN at Notre Dame de Gravenchon, France. Hoechst's "Hostalen" PE, used primarily in packaging, pipes and speciality films, is produced at Münchmünster and Knapsack in Germany, and at Tarragona, Spain. The group also has a global licensing business.
If cartel authorities approve, Hoechst will transfer production facilities of its PE spin-off Hostalen Polyethylen GmbH in Germany and Spain to Elenac and push that company, set up at the beginning of 1998, towards the top among European PE producers. The addition of Hoechst's output to that of BASF, Shell and Montell, the former joint venture between Shell and Montedison, would give Elenac nearly 2m t/y of capacity and DEM 4 bn in annual sales of HDPE and LDPE. In the same category are Borealis and Polimeri Europa.
The Hoechst-Elenac deal lends weight to speculation that it may have been a contingency plan all along. Some observers have suggested that the EU's prolonged approval process for Elenac may have examined the repercussions of an even bigger merger. Based at Strasbourg and Kehl, the company currently employs 2,500 and has annual sales of some DEM 3 bn. Production sites are Ludwigshafen and Wesseling in Germany, Berre and Fos in France, and Carrington in the UK. It also owns 50% of CIPEN at Notre Dame de Gravenchon, France. Hoechst's "Hostalen" PE, used primarily in packaging, pipes and speciality films, is produced at Münchmünster and Knapsack in Germany, and at Tarragona, Spain. The group also has a global licensing business.
31.07.1998 Plasteurope.com [18525]
Published on 31.07.1998