Later in 2015, an acquisition between LyondellBasell (LYE: NYSE) and SJS Plastiblends (SJS) will be finalized. The deal between the two companies was signed on 7 August, 2015 and it will give LyondellBasell an opportunity to grow its PPC manufacturing capacity and to expand into India’s rapidly growing automotive industry. The investment bank from Mumbai – Singhi Advisors – acted in the interests of SJS Plastiblends (SJS) to facilitate the transaction. The financial terms and conditions of the deal were not revealed. LyondellBasell has enjoyed a boost in Q2 profits on the back of plunging prices for natural gas.
LyondellBasell is a global power player in the world of refining, plastics and chemicals and the deal with SJS Plastiblends (SJS) will allow it to solidify its position in India’s burgeoning automotive market. SJS Plastiblends is a manufacturer of polypropylene compounds and it is located in Maharashtra in India. The chairman and CEO of LyondellBasell, Bhavesh V. Patel, intimated that the company is proud of its position in the world and it anticipates ongoing growth and expansion to continue in India.
For LyondellBasell, supplying India is nothing new. The company has been operating in India for 6 years already, however it will be looking to enhance its position in the lucrative Indian automotive market, which is the 4th largest in the world. There is plenty of interest in tapping into this market, and the country’s growth rate ranges between 6% and 8% per annum, and will continue to remain in that range right through until 2021.
Six years ago, LyondellBasell was rescued from certain financial ruin by a 50% equity purchase by a prominent German entrepreneur. The strategic investment in 2009 allowed the company to continue operating with a 50/50 partnership with ProChemie Holding, forming ProChemie GmbH. LyondellBasell and its multiple affiliates had filed for Chapter 11 bankruptcy in 2009 and this prompted the joint venture with ProChemie Holding. The owner of ProChemie Holding was deeply invested in Pall Mall Capital, Luhns and Heckler & Koch in the past.
LyondellBasell is listed on the S&P 500 and it operates in 18 countries and 55 sites around the world. The company is in the business of manufacturing a wide range of technologies and products for improving the quality of life for people everywhere. Products include automotive parts, bio-fuels, building materials, packaging and electronics. SJS is involved in the business of improving the look and performance of plastics used in the automotive industry. The company produces 12,000 metric tons of PPC and boasts one manufacturing facility with 60 employees. The compounds are used in the production of thermoplastics for the automotive industry.