The Woodlands, Texas-based Chevron Phillips Chemical Co. LLC could be the
next big chemicals takeover target. Formed by oil giants Chevron Corp. and
ConocoPhillips Co. in 2000, it has $12 billion in sales, and it makes and sells
70,000 different products in 80 countries. It would be tasty for Basell Holdings
BV, Ineos Group Ltd. or acquisition-hungry national oil companies in the Middle
East. A sale would give the two partners more cash for big acquisitions in their
core oil and gas business or develop better technologies for getting reserves
out of hard-to-get-to places, like the deep waters of the Gulf of Mexico.
Chevron and ConocoPhillips have already sold off a few pieces of their joint
venture. In October 2006, Chevron Phillips Chemical shed a cumene production
unit to Ineos for an undisclosed amount. And in April, it forged a deal with Dow
Chemical Co. — which was
rumored
to be considering a leveraged buyout — to combine their polystyrene and styrene
plastics units. But at a luncheon hosted by the Houston Strategic Forum on
Tuesday, joint venture CEO Ray Wilcox said there's nothing in the works. "It's
not what we want to do," he said. He wants to keep the quality of his products
up, the cost of his products down and maintain his plants to become the supplier
of choice for customers. He's begun a big expansion of his plants in Qatar and
Saudi Arabia to be closer to supply. "The golden rule," he quipped, "is whoever
has the gold rules." Plastics, anyone? —Claire
Poole
See earlier post
Continue reading below
