Solvay/Ineos PVC jv starts up; BASF divests stake in Solvay PVC jv

Following the 2013 announcement of the chlorvinyls 50:50 joint venture between Solvay and Ineos http://www.plasticsandrubberasia.com/may2013/company5.html and subsequent evaluations of the mega deal by the European Commission (EC), the companies have started up the joint venture known as Inovyn, following EC approval. This also follows EC’s approval of International Chemical Investors Group’s (ICIG) acquisition of the remedy business that is being divested by Ineos as a condition of clearance for the joint venture.

Last year, both parties had jointly put forward a revised remedy package to address the competition concerns that had been raised by the EC. The remedy package comprised the divestment of PVC plants operated by Ineos at Schkopau (Germany), Beek (the Netherlands) and Mazingarbe (France) along with the chlor-alkali, EDC and VCM assets at Tessenderlo (Belgium). http://www.plasticsandrubberasia.com/mar2014/company7.html

“Solvay’s transformation has reached a key milestone with the creation of Inovyn and we will continue to focus on increasing its growth, returns and resilience,” said Jean-Pierre Clamadieu, CEO of the Brussels-headquartered Solvay.

"The Inovyn joint venture combines two businesses with a strong heritage in the chlorovinyls industry, creating a company fit to thrive in an ever changing business environment," said Jim Ratcliffe, Chairman of Ineos.

The finalised terms of the joint venture agreement remain materially unchanged from those announced in June last year. Solvay received upon closing an upfront cash payment of EUR150 million – subject to customary adjustments such as actual working capital levels. In addition to contributing their entire European chlorovinyl business Solvay has transferred liabilities estimated at EUR260 million into the joint venture.

In three years’ time, Solvay will exit Inovyn and receive an additional, performance-based payment targeted to be EUR280 million, with a minimum of EUR95 million. Thereafter, Ineos will be the sole owner of the business.

Also effective 1 July, Solvay has bought BASF’s 25% stake in its PVC joint venture SolVin. Financial details were not disclosed. In addition, Solvay and Inovyn have agreed to continue supplying basic chemicals to the BASF site in Antwerp. Solvay contributed its vinyl activities, formerly part of SolVin, to Inovyn.

Headquartered in London, Inovyn has pro-forma sales of more than EUR3 billion, with 4,300 employees and assets across 18 sites in Belgium, France, Germany, Italy, Norway, Spain, Sweden and the UK. Governance of the Joint Venture is equally split between the partners.

The Solvay Group employs about 29,000 people in 55 countries and generated EUR12.4 billion in net sales in 2012.

Ineos is a global manufacturer of petrochemicals, speciality chemicals and oil products. It comprises 15 businesses each with a major chemical company heritage. Its network spans 65 sites in 16 countries throughout the world.