World's largest chemical producer BASF and Mexico's Alpek have agreed to restructure their 50:50 Mexican joint venture Polioles.

Under the terms of the transaction set to close in 2015, BASF will acquire the jv's polyurethane assets, including unidentified "selected assets" of the Lerma, Mexico, facility as well as marketing and selling rights for polyurethane systems, the isocyanates MDI and TDI, and polyols.

In exchange, Alpek will take BASF's EPS business operations in North and South America. The deal takes Polioles' Altamir plant, along with production facilities for EPS at Guaratinguetá, Brazil and General Logos, Argentina and all sales and distribution channels in the Americas but does not include BASFs Neopor gray EPS grade, which is produced in Germany and Korea.

Altogther, Alpek is picking up 230,000 t/y of EPS capability, including the 165,000 t/y produced at Altamira.

While Performance Materials division head Raimar Jahn said BASF plans to focus its EPS business on the strategic markets of Europe and Asia, as well as on Neopor, Alpek CEO José de Jesús Valdez said the arrangement represents "an attractive opportunity" for his company to build on its EPS operations in Mexico, expand its EPS footprint across the Americas and consolidate its plastics & chemicals portfolio."

Mexico's largest petrochemical company and Latin America's second largest with $7 billion, Alpek is a leading producer of PTA and PET.  It operates the largest EPS plant in the Americas and one of the largest polypropylene plants in North America. It is also Mexico's sole producer of caprolactam.