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Argentina’s YPF returns to PP market with two acquisitions, including stake in LyondellBasell unit

August 19, 2015
Energy & Chemical Value Chain
LyondellBasell Industries says it has accepted Yacimientos Petrolíferos Fiscales (YPF; Buenos Aires) and Grupo Inversor Petroquímica’s (GIP; Madrid) joint offer to purchase LyondellBasell’s wholly owned polypropylene (PP) subsidiary Petroken Petroquímica Ensenada (Buenos Aires). YPF and GIP will each hold a 50% stake in Petroken. YPF and GIP, meanwhile, are acquiring equal parts of a 92% stake in Petroquímica Cuyo (Buenos Aires), another PP producer. The acquisitions mark YPF’s return to a market it had been active in until 2004–05.
 
The Petroken transaction is valued at $145 million on a debt- and cash-free basis. LyondellBasell expects proceeds of $162 million based on working capital estimates as of 30 June. The sale is to close expected in late 2015, following approval from Brazil’s antitrust body CADE (Brasilia), LyondellBasell says.
 
Petroken operates a 180,000-m.t./year PP plant at Ensenada, Argentina, near Buenos Aires. The company has long-term agreements to receive feedstock from suppliers including YPF and Shell’s Capsa (Buenos Aires) subsidiary, according to Petroken’s Web site. 
 
Petroquímica Cuyo operates a 130,000-m.t./year PP line at Luján de Cuyo, in western Argentina. The plant sources its feedstock mainly from YPF’s Luján de Cuyo refinery. 
 
“This acquisition is in line with our strategy to continue building an integrated business … securing the value-added of our production. The petrochemical sector has large potential in Argentina and is part of YPF’s growth strategy,” says Miguel Galuccio, president and CEO of YPF.
 
YPF says that it will pay $122 million in total for its stakes in the two PP companies.
 
By Francinia Protti-Alvarez
 

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