Monday, February 21, 2005

Ineos, Basell: bids and beyond

Those who know (or think they do) don't believe Ineos is in with a snowflakes chance in Hades of getting Basell. That's a polyethylene joint venture between a large clam and a venerable (and wealthy) German.

The front runner's got to be National Petrochemical Company of Iran. Iran makes it difficult to do a deal, but look at all the gas sitting there, look at the implicit state backing from the Iranian Government, which controls NPC, and look to the future. Both Shell and BASF are interested in natural gas, and NPC is keen on technology and large production sites in the heart of Europe. Ineos' strategy of offering a low priced, but quick to close deal looks thin, now that Oil majors are generating more cash than Croesus dreamt of.

The bid from a consortium involving Halida Petrochemicals, which seems to be based on "what shall we do with that large pile of cash sitting under the bed then" could be in with a shout, if the sums add up.

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