Braskem Acquires the Polypropylene (PP) Business of Dow Becoming the Leader in the US PP Market
SAO PAULO, July 27, 2011 /PRNewswire/ -- BRASKEM S.A. (BM&FBovespa: BRKM3, BRKM5 and BRKM6; NYSE: BAK; LATIBEX: XBRK), the leading resin producer in the Americas announced the acquisition of the Polypropylene Business ("Business") from The Dow Chemical Company ("Dow") for US$323 million. This transaction represents an important step in Braskem's growth strategy in the Americas and also consolidates its PP leadership in the US.
The Business has total annual polypropylene production capacity of 1,050 thousand tons, with four industrial plants in the US and Germany. The two plants located in the US, at Freeport and Seadrift, TX, add up to 505 thousand tons, increasing Braskem's PP capacity by 50% in the region. The two plants located in Germany, at the petrochemical complexes of Wesseling and Schkopau, have annual capacity of 545 thousand tons of PP.
"The acquisition of Dow's PP assets positions Braskem as the leading producer of polypropylene in the US, the world's largest thermoplastic resin market, and it also enhances our current position in Europe, an important market for our biopolymers strategy, said Braskem's CEO Carlos Fadigas.
"In addition, as our 2nd acquisition in the US, this transaction will enable Braskem to capture approximately US$140 million in synergies (net present value) through a more diversified portfolio, a more leveraged fixed cost base and working capital, logistics and supply optimization", he also said.
The closing of this transaction is expected to happen by the end of the third quarter 2011 pending regulatory approvals.
In this acquisition, Braskem engaged HSBC as financial advisor and Skadden, Arps, Slate, Meagher & Flom as legal advisor.
More information can be obtained from Braskem's Investor Relations Department by telephone +55 (11) 3576-9531 or by e-mail firstname.lastname@example.org.
SOURCE BRASKEM S.A.