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Alpek to acquire large part of BASF's EPS business, BASF to buy Polioles's PU operations (Update)

7:47 AM MDT | July 11, 2014 | Natasha Alperowicz

BASF today provided more information on its asset swap deal with Alpek, which was announced on Thursday. Alpek and BASF have signed agreements covering the expandable polystyrene (EPS) and polyurethane (PU) business activities of their Polioles joint venture in Mexico and BASF’s EPS business in North America and South America, excluding BASF’s Neopor grey EPS business. Under the terms of the agreement, Alpek will acquire all of Polioles’s EPS business activities, including its EPS production site at Altamira, Mexico. BASF, meanwhile, will acquire Polioles’s PU business activities, including selected assets at its Lerma facility as well as all marketing and selling rights for PU systems, isocyanates, and polyols. On the completion of the transaction, Polioles will continue operating as an Alpek-BASF jv with product portfolio comprised of industrial specialty chemicals.
 
Alpek will also acquire BASF’s EPS business activities in North America and South America, including BASF’s EPS sales and distribution channels there. It will also acquire BASF’s EPS production facilities at Guarantinguetá, Brazil, as well as General Lagos in Argentina and BASF’s EPS foam parts business in Chile, run by Aislapol. The combined capacity of all EPS production facilities that Alpek will acquire is about 230,000 m.t./year. This figure includes Polioles’s 165,000-m.t./year production plant at Altamira. Approximately 440 employees work in the businesses—around 380 in EPS and 60 in PU—that are subject to the agreements. The majority of these employees will keep their position under the new ownerships. The deal will leave BASF with 600,000 m.t./year EPS capacity in Europe and Asia. The company says that in Europe it has some debottlenecking potential, which can be carried out at a future date. It makes EPS at Ludwigshafen; Ulsan, South Korea; and at its joint venture at Nanjing, China. The announcement by BASF to sell a significant part of its EPS business comes soon after its decision to exit Styrolution, its styrenics jv with Ineos by selling its share to its partner.
 
BASF will continue to sell Neopor to its customers in the United States, Canada, and South America. In Mexico, Alpek will sell Neopor for BASF based on a distribution agreement. All the agreements are subject to approval by the appropriate authorities, with the transaction's closing expected in early 2015. Financial terms have not been disclosed.
 
“This transaction represents an attractive opportunity for Alpek to build upon its EPS operations in Mexico, expand its EPS footprint across the Americas, and consolidate its plastics and chemicals product portfolio,” says José de Jesús Valdez, Alpek’s CEO. "It also reaffirms Alpek’s commitment to the EPS value chain, where we will continue providing the highest standard of quality and service to all our customers."
 
“The acquisition of the PU business significantly strengthens BASF performance materials’ industry-oriented customer solutions approach across North America and globally. BASF will focus its EPS business on strategic markets in Europe and Asia as well as on Neopor, which is produced in Germany and Korea,” says Raimar Jahn, president/performance materials at BASF.













 
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