BP announced on Monday that it has agreed to sell its global petrochemical business to Ineos for $5bn.
In a statement, BP said that, under the terms of the agreement, Ineos will pay a deposit of $400m, with a further $3.6bn to be paid upon completion. An additional $1bn will be paid in three separate instalments of $100m in March, April and May 2021, with the remaining $700m to be paid by the end of June 2021.
BP’s petrochemical business is focused on two major operations, aromatics and acetyls. The company has invested in leading technology and preference manufacturing plants for both operations, including a strong presence in Asian growth markets.
In total, companies have interests in 14 plants in Asia, Europe and the US, producing 9.7 million tonnes of petrochemicals in 2019.
Bernard Looney, CEO of BP said, “I understand that this decision will be a surprise, and we will continue our best efforts to reduce the uncertainty. However, I am confident that companies will thrive as part of Ineos, the world leader in the petrochemical industry”.
He added, “Strategically, the overlap with the rest of BP is limited and it will take large capital for us to develop these companies. We are working to build a more focused and integrated BP. We have other opportunities more in line with our future direction. Today’s agreement is another considered step in building a competitive and successful BP,”
Brian Gilfari, BP’s Chief Financial Officer, said, “With today’s announcement, we have reached our target of $15bn to withdraw agreed investments a year ahead of schedule, which indicates the extent and quality of the options available to us.”
Ineos is a leading global chemical company, with a network covering more than 180 locations in 26 countries, and employing about 22,000 employees worldwide.