Embargo : November 3, 2004 at 8:30 AM Brussels Time
Exercise of put option confirms Solvay’s focus on specialty polymers
Solvay SA announces today that it has exercised its option to sell its stakes in the BP Solvay Polyethylene joint ventures to BP, effective early 2005 - pending approval by the relevant authorities and information/consultation procedures with workers’ representatives. Solvay currently holds 50% of BP Solvay Polyethylene Europe and 51% of BP Solvay Polyethylene North America. After completion, BP would become the full owner of the European and American joint ventures.
Solvay and BP have also addressed and agreed on a number of operational issues to ensure the seamless continuation of the activities of the joint ventures.
The BP Solvay Polyethylene subsidiaries were created in August 2001 to combine both groups’ high density polyethylene (HDPE) activities, in parallel with two other transactions in which Solvay sold its polypropylene activities to BP and acquired BP’s specialty polymers business. Later in 2001, to further its leadership in specialty polymers, Solvay acquired Ausimont, now called Solvay Solexis. To help the financing of this latter acquisition, Solvay monetized the proceeds of its option to sell its stakes in the polyethylene joint ventures to BP. To that effect, a fully consolidated subsidiary of Solvay issued EUR 800 million of preferred shares, which were subscribed by several banks. A substantial part of the proceeds from the actual exercise of Solvay’s option on BP will be used to redeem all of the preferred shares for EUR 800 million.
“Solvay has successfully implemented its strategy aiming at a rapid growth of its high value added specialties, which are now among the largest contributors to the Group’s results,” said Aloïs Michielsen, chairman the Executive Committee of Solvay. “The exercise of our put on the BP Solvay Polyethylene ventures confirms our intention to focus on R&D-intensive activities and on businesses where we have a clear competitive advantage,” Michielsen added.
BP is one of the largest global petrochemicals companies offering an integrated range of products, including olefins, polypropylene, HDPE (high density polyethylene), acrylonitrile, paraxylene (PX), purified terephthalic acid (PTA) and acetic acid. It has indicated that the former-joint venture HDPE business will be part of its proposed standalone olefins and derivatives company due to be created in 2005.
Solvay is an international chemical and pharmaceutical group with headquarters in Brussels. It employs more than 30,000 people in 50 countries. In 2003 its consolidated sales amounted to EUR 7.6 billion generated by its three activity sectors: Chemicals, Plastics and Pharmaceuticals. Solvay is listed on the Euronext 100 index of top European companies. Details are available at www.solvay.com.
