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LyondellBasell Growing with Inorganic Growth Approach

July, 2018

Ongoing Merger of A. Schulman

LyondellBasell’s acquisition of A. Schulman, the deal worth $2.25 billion, has already got clearance from antitrust regulators in the US, Serbia, China, Turkey and Serbia. Shareholders also approved the merger. The merger shall give LyondellBasell the capability and access to downstream markets such as high engineered plastics, engineered composites, and masterbatch.

Braskem Acquisition Talks

Last week LyondellBasell confirmed the talks for acquisition of Braskem, only polyolefin producer in Brazil with presence in the US and European markets. LyondellBasell and Odebrecht (largest stakeholder in Braskem) issued a joint statement announcing their exclusive discussion. The coverage of Braskem would extent LyondellBasell’s presence to Brazil where Braskem is the only producer, strengthening the capacity in the US and European market.

Markets Impact

The product portfolio from A. Schulman is expected to support the thinning margins for petrochemical business. Access to downstream market of engineered materials can produce synergies helping in maximizing margins. Further, the access to high margin markets such as 3D printing plastics and premium OEM materials is also expected to help LyondellBasell in improving margins for it’s shareholders.

The Braskem deal is expected to add new footprints in Brazil which has been unexplored market for any other plastic supplier. Further, Braskem is only producer building polypropylene plant in the US gulf coast which is expected to come online in 2020.

About LyondellBasell

LyondellBasell is one of the largest producers of plastics and chemicals in world. With employee base of 134,000, LyondellBasell has exposure in various industries including construction chemicals (polyolefins for foam insulation), High Performance Elastomers, Flexible packaging, Food safety among others.

Ankur Kalra,
Infoholic Research