BP and Enichem to merge styrenes
The dollars 1bn merger, formally expected to be announced in January, follows months of talks aimed at setting up close trading links in a range of petrochemicals.
It is understood that their discussions have progressed much further than originally envisaged and the two sides are close to signing a full merger of their styrenes businesses.
The 50-50 joint venture will have a combined annual turnover of dollars 1bn (pounds 600m) and speak for about 22 per cent of the European market in styrenes, an important feedstock for plastics packaging and rubber products.
It will be Europe's second biggest styrenes producer after BASF of Germany.
The expected merger is the first such move by BP's chemicals division and is part of a restructuring plan aimed at improving its financial performance. In the first half to 30 June, BP Chemicals made an operating loss of pounds 21m against a pounds 62m profit last time.
A BP Chemicals spokesman said: 'The talks are progressing well and are aimed at building a strategic alliance with Enichem.'
The move is in response to massive overcapacity in European petrochemicals, which has forced other multinationals to explore mergers and strategic alliances.
Last month Shell, the world's biggest petrochemicals company, announced it was planning a merger of its polyoelfins (also used in plastics) business with Italy's Montedison.
Details have yet to be finalised, but the merger would create a business with turnover of dollars 3.6bn and a European market share of about 20 per cent.
Both Shell's and BP's proposals will require clearance from the European Commission, which is understood to accept the need for a shake-up of the industry.
- 1 'Fire at every person you see': Israeli soldiers reveal they were ordered to shoot to kill in Gaza – even if the targets may have been civilians
- 2 Italian police 'reveal' what Jesus looked like as a young boy
- 3 General Election 2015: 14-year-old boy asks Nick Clegg – 'can you kill Katie Hopkins?'
- 4 Garland shooting: Isis claims attack on Prophet Mohamed cartoon contest in Texas as its first action on US soil
- 5 Met Gala 2015: Beyoncé manages to out-skimp Rihanna, Miley and Kim Kardashian combined with near-naked ensemble
Italian police 'reveal' what Jesus looked like as a young boy
Who should I vote for? The Independent quiz matches best political party for undecided voters ahead of the general election
Met Gala 2015: Beyoncé manages to out-skimp Rihanna, Miley and Kim Kardashian combined with near-naked ensemble
Syria's 'circle of hell': Aleppo residents describe children without heads, streets filled with blood and injuries never before witnessed by surgeons
General Election 2015: Photographic history of Bullingdon Club tracked down - including new picture of David Cameron in his finery
In defence of liberal democracy
Over 50,000 families shipped out of London boroughs in the past three years due to welfare cuts and soaring rents
EU asylum policy is 'a direct threat to our civilisation', says Nigel Farage
The Rothschild Libel: Why has it taken 200 years for an anti-Semitic slur that emerged from the Battle of Waterloo to be dismissed?
General Election 2015: UK will be 'run for the wealthy and powerful' if Tories retain power, Labour warns
Schools forced to act as 'miniature welfare states' with teachers buying underwear and even haircuts for poor pupils
iJobs Money & Business
£20000 - £25000 per annum + Uncapped commission: SThree: Can you speak German,...
£25000 - £30000 per annum + benefits: Ashdown Group: An exciting opportunity f...
£215 per day: Ashdown Group: Junior Project Manager (website, web application ...
£40-50K: Guru Careers: We are seeking an experienced Software Engineer / Softw...