Rumors of LyondellBasell-Braskem Deal Resurface
The international stock market rumor mill was buzzing on May 24 as reports resurfaced that Dutch-headquartered, US-managed chemical group LyondellBasell had made an offer – now apparently off the table – to acquire a controlling stake in Brazilian chemical giant Braskem from its majority owner, Brazilian conglomerate Odebrecht, which owns 38.1%.
The offer reportedly valued the company at $11.4 billion. Braskem’s other major shareholder, Brazilian oil group Petrobras with 36.1%, has not been mentioned in any of the takeover reports so far.
In October 2017, rumors of a takeover of Braskem by LyondellBasell, published by the US financial newspaper Wall Street Journal had already stirred up by the market. Those rumors were also denied by Odebrecht. At the time, a selling price in the range of $10-11 billion was mooted.
In a May 24 statement, Braskem denied the latest speculation, published this time by the newspaper Valor Econômico. Quoting Odebrecht, it said no such offer had been received. The paper said the chemical group had made the offer in February but talks had stalled in early May. According to its sources, LyondellBasell was being advised by Morgan Stanley, Odebrecht by Lazard.
LyondellBasell has remained silent on the latest buzz, saying it does not comment on rumor or market speculation. Contacted by the news agency Reuters, neither Lazard and Morgan Stanley would immediately comment.
Comments last autumn suggested that, along with being a budget breaker for LyondellBasell, such a deal would attract regulatory attention and also rally opposition in Brazil to the takeover of a national “champion” by a US-basesd company. The Houston, Texas-managed chemical group has no production activities in the South American country, however.
Most of Odebrecht’s stakeholding in Braskem is reportedly pledged in collateral to Brazilian banks, and negotiations for refinancing of the conglomerate’s debt are said to be ongoing.
Again citing its majority owner, the Brazilian chemical producer said Odebrecht intends to maintain its presence in the petrochemical sector and that it “continues to seek alternatives that bring value to Braskem.”
The conglomerate has been under investigation on corruption charges for some time. According to US prosecutors, Odebrecht paid hundreds of millions of dollars in bribes for contracts for projects in 12 countries, including Brazil, Argentina, Colombia, Mexico and Venezuela, between 2002 and 2016.
In December 2017, Odebrecht and Braskem pleaded guilty in a US court and agreed to pay at least $3.5 billion to settle with US, Brazilian and Swiss authorities.
