Ratcliffe boosts empire
Ineos acquires BP chemicals unit in $5bn deal
Grangemouth: a petrochemicals hotbed (pic: Terry Murden)
Wealthy industrialist Sir Jim Ratcliffe has added to his Ineos empire after sealing a $5 billion (£4bn) deal to buy a slice of oil major BP.
The Grangemouth refinery operator is acquiring BP’s petrochemicals business which makes a key component used in polyester.
The number of employees involved in the transaction is about 1,700 .
BP said the deal marked the next strategic step in “reinventing BP”. It said it will further strengthen the company’s balance sheet and delivers its target for agreed divestments a year earlier than originally scheduled
The businesses have interests in 14 manufacturing plants in Asia, Europe and the US and in 2019 produced 9.7 million tonnes of petrochemicals.
Bernard Looney, BP chief executive, said: “This is another significant step as we steadily work to reinvent bp. These businesses are leaders in their sectors, with world-class technologies, plants and people.
“In recent years they have improved performance to produce highly competitive returns and now have the potential for growth and expansion into the circular economy.
“I am very grateful to our petrochemicals team for what they have achieved over the years and their commitment to bp. I recognise this decision will come as a surprise and we will do our best to minimise uncertainty. I am confident however that the businesses will thrive as part of INEOS, a global leader in petrochemicals.
“Strategically, the overlap with the rest of bp is limited and it would take considerable capital for us to grow these businesses. As we work to build a more focused, more integrated bp, we have other opportunities that are more aligned with our future direction. Today’s agreement is another deliberate step in building a bp that can compete and succeed through the energy transition.”
INEOS has a network spanning over 180 sites in 26 countries, employing some 22,000 staff worldwide. Over the past two decades, it has acquired a number of businesses from BP, most notably the 2005 $9 billion purchase of Innovene, the bp subsidiary that comprised the majority of bp’s then chemicals assets and two refineries.
Brian Gilvary, BP’s chief financial officer, said: “With today’s announcement we have met our $15 billion target for agreed divestments a full year ahead of schedule, demonstrating the range and quality of options available to us.”
Mr Gilvary, who led the negotiation with the owners of INEOS, added: “bp has had a long relationship with INEOS and this agreement reflects the mutual respect and trust that exists between us. It is a strategic deal for both parties that recognises both the high quality of the businesses and that INEOS is in many ways a natural owner for them.”