RIL closes in on big-bang overseas acquisition

Reliance Industries (RIL), India’s largest private sector company by market capitalization and sales, is close to announcing a major overseas acquisition. If all goes according to plan, RIL is looking to do so before its annual general meeting on November 17, a source close to the development said.

The likely target is a part of the assets owned by troubled petrochemical major LyondellBasell, which is undergoing reorganization under the protection of a US court. The intent is to make an announcement on the day of the AGM or very close to it but that depends on how the talks progress. The transaction could be in the region of $6 billion and may include both the US and the European assets of LyondellBassell.

Reliance Industries is reviewing a number of global opportunities for growth in its core business. The difficult operating environment of the past year has made available several interesting opportunities, where an investment by a strategic operator of industrial assets can add substantial value.

RIL will enjoy a lot of synergies if it acquires LyondellBasell. It will benefit from state-of-the-art technologies of LyondellBasell. Besides, its marketing and distribution network come in handy. LyondellBasell will provide a ready market for RIL and RIL may turn it around if it is able to source feedstock at a cheaper rate.