INEOS announced it has reached an agreement to acquire the Vinyl Acetate Monomer (VAM) and Ethyl Acetate (EtAc) businesses from BP. The deal comprises 500ktpa of production capacity at the Saltend manufacturing site near Hull, UK, along with the Teesside to Saltend Ethylene Pipeline (TSEP).
The acquisition of BP’s Acetate businesses provides a complementary fit with the portfolio, technologies and expertise of INEOS. It also allows the company to optimise existing links between the Hull and Grangemouth sites.
“The addition of these facilities broadens the INEOS portfolio of oxygenated solvents, optimises existing links with our Grangemouth site and helps us to meet the growing demand for both products," said Jim Ratcliffe, INEOS Chairman. “These are well placed assets, complemented by a very experienced operations team and high safety, health and environmental standards. Acquiring these two businesses provides another step forward in the development of INEOS Enterprises and INEOS Oxide in Europe”.
The Ethyl Acetate plant was commissioned in 2001 and has a capacity of 250ktpa, making it one of the world’s largest single Ethyl Acetate facilities. Ethyl Acetate is used in the manufacture of printing inks, glues, paints, packaging, cosmetics and pharmaceuticals. The Vinyl Acetate Monomer plant, which also has 250ktpa capacity, was commissioned in 2002 and supplies an essential raw material for paints, adhesives, floor coverings and clothing production. Between them, the facilities employ around 40 people, who it is expected will transfer to INEOS on completion of the acquisition. The combined sales revenue in 2007 was around $400m.
Upon completion, products from the newly acquired businesses will be integrated into the portfolios of INEOS Oxide and INEOS Enterprises. Ethyl Acetate will become part of the INEOS Oxide solvent portfolio and will be supplied through existing channels to market alongside butyl acetate, glycol ethers and glycol acetates. Vinyl Acetate Monomer will add a new product line to the INEOS Enterprises business and will reinforce its strategy of growth through acquisition of businesses with good manufacturing facilities combined with sufficient size and scale for growth. It is expected that INEOS Enterprises will assume overall responsibility for operating both facilities.
“We are pleased to have reached this agreement with INEOS. The sale of our Acetate businesses concludes an important part of our strategy to re-focus BP’s operations at the Saltend site,” comments Dave Smith, General Manager of BP European Acetyls. “In line with the strategy that we announced in 2007, the sale will allow us to focus on our commitment to supply Acetic Acid and Acetic Anhydride to customers around the world. During the transition, BP and INEOS are committed to a high level of business continuity.”
The acquisition is being made by INEOS Group and is conditional on approval from the EU competition authorities. The transaction is expected to close in the first quarter 2008.