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RIL moves towards a mega takeover

23 Nov 2009 Evaluate

In what may be the first step towards one of the biggest overseas acquisitions by an Indian company, Mukesh Ambani-controlled Reliance Industries has made a preliminary non-binding offer' to acquire LyondellBasell, the world's third largest petrochemical company, based in Rotterdam, The Netherlands.

 

The Dutch company had filed for bankruptcy protection for its US operations and a European finance subsidiary in January this year -- hardly a year after Russian-born billionaire Len Blavatnik acquired the US-based Lyondell in a $12.7 billion leveraged acquisition.

 

Neither RIL nor LyondellBasell clarified whether the offer was for the entire company, including its non-US operations, or for the distressed US assets only. LyondellBasell's US operations are based out of Houston where it has 4,000 employees. The company has a total of around 25,000 employees worldwide.

 

The value of the US assets, which are expected to emerge out of bankruptcy next year, is speculated to be $5 billion. The company had said it has assets of $27 billion and debt of $19 billion. The record for the biggest overseas acquisition by an Indian company currently lies with Tata Steel which acquired European steelmaker Corus for around $12 billion in 2007.

 

Reliance is reviewing a number of global opportunities for growth in its core business. This review is ongoing and there can be no assurance of the outcome with respect to any of the opportunities under review, including with respect to LyondellBasell, or that any approach made in connection with such opportunities will result in a transaction.

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