BASF SE (Ludwigshafen, Germany) and INEOS Industries Holdings Limited (Lyndhurst, UK) intend to combine their global business activities in styrene monomers (SM), polystyrene (PS), acrylonitrile butadiene styrene (ABS), styrene-butadiene block copolymers (SBC) and other styrene-based copolymers (SAN, AMSAN, ASA, MABS) as well as copolymer blends into a new joint venture called Styrolution.
ABS (Acrylnitrile-Butadien-Styrene) is a thermoplastic resin, used primarily for aesthetic colorful parts requiring heat and impact resistance, and has automotive applications. Styrene-based copolymers (SAN, AMSAN, ASA, MABS) and blends (ABS/PA, ASA/PA, ASA/PC) are thermoplastic resins mainly used in various technical applications i.e. automotive, garden equipment, tools, appliances and Consumer Electronics, Communications Devices & Computers.
A letter of intent was signed by the two companies on 29 November 2010. The establishment of the joint venture is subject to approval by the appropriate antitrust authorities.
BASF has previously announced that it will carve out its styrenics activities by the end of 2010 and transfer them into separate entities. The carve-out will continue as planned and as of 1 January 2011, BASF’s styrenics activities will operate as a separate company with the name Styrolution. INEOS has also announced that it is to acquire the other 50% shareholding in its 50-50 styrenics joint venture, INEOS NOVA, from NOVA Chemicals. Upon completion of the proposed joint venture with BASF, INEOS will transfer these activities into the new Styrolution group.
Expandable polystyrene is not part of the transaction. BASF and INEOS will retain their expandable polystyrene businesses. The SM/PS capacities in Ludwigshafen used to produce foam will also remain with BASF as well as the SM/PS business of BASF-YPC Co. Ltd., in Nanjing, China.
Based on figures for 2010, Styrolution is expected to generate annual sales of more than €5 billion. Company headquarters will be located in Frankfurt/Main, Germany. 50% of shares of the joint venture will be owned by BASF and 50% by INEOS. BASF will receive cash consideration following the completion of the transaction. The parties did not disclose any further financial details.