Basell Polyolefins purchased Lyondell Chemical Company for $12.7 billion in 2007 and the new company became LyondellBasell.
LyondellBasell has around 13,400 employees and sells products in around 100 countries. It’s the world’s largest licensor of polyolefin technologies.
LyondellBasell produces basic chemicals including ethylene, propylene, propylene oxide, ethylene oxide, tertiary butyl alcohol, methanol, acetic acid, and their derivatives.
After emerging from bankruptcy in April 2010, LyondellBasell became the third largest independent chemical manufacturer in the United States in 2016.
Basell Polyolefins
Basell Polyolefins was a joint venture between BASF and Royal Dutch Shell. It was acquired by British-American businessman Leonard Blavatnik’s (Access Industries) for $5.7 billion in August 2005.
Basell was the fruit of a series of acquisitions. Its roots lies in the polyolefin revolution of the late 1930s and 1950s.
Two Nobel Prize-winning scientists played an important role in the companies that preceded Basell: Karl Ziegler and Giulio Natta. Karl Ziegler discovered the first linear polyethylene (PE) chain in 1953 and Giulio Natta polymerizes the first crystalline polypropylene in 1954.
Lyondell Chemical Company
Lyondell Chemical Company manufactured and sold chemicals and plastics. The company was established in 1985. The Company refined heavy, high-sulfur crude oil, and produced gasoline blending components.
Lyondell Chemical served pharmaceutical, textiles, agricultural, packaging, electronics, personal care, and other markets worldwide.
Mergers and Acquisitions
Basell Polyolefins paid too much for Lyondell Chemical Company. The consequence was that the US operations of LyondellBasell filed for Chapter 11 bankruptcy protection in January 2009. Why did Basell pay too much? Leonard Blavatnik owned many shares in Lyondell besides owning Basell. He managed to make Basell overpay for Lyondell so as to realise a massive profit.
LyondellBasell wanted to buy Braskem from Odebrecht in June 2018. Odebrecht owns 50.1 % of Braskem’s voting capital and Petrobras owns 47 %. Odebrecht’s stake in Braskem was valued at $5.4 billion at that moment. It was a hard hit for LyondellBasell not to be able to buy Braskem. They missed an opportunity of becoming the world leader in BIO-PE (polyethylene made from renewable resources instead of crude oil).
Cooperation Between Neste And LyondellBasell, What’s at stake?
Neste and LyondellBasell recently announced through a common press release that they produced bio-based polypropylene and bio-based low-density polyethylene at commercial scale.
Neste cannot rely only on biofuel/biodiesel in the future. Biofuel may be popular in some regions where the crops are grown (South America and Asia) but will not pick up in other regions such as Europe for instance. Neste needs to make a big move into bioplastics and therefore needs a sparring partner with expertise in the plastics industry.
LyondellBasell needs something new after the Braskem debacle. Making a move into renewables and bioplastics is the best option.
Neste will bring its expertise in renewable feedstock and LyondellBasell’s will bring its technical capabilities to the table.
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