Shell and BASF risk US anger as Iranians near deal to buy Basell

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The Independent Online

Iran's National Petrochemical Company (NPC) is close to sealing a politically sensitive $4.4bn (£2.3bn) deal to buy Basell, the polymer business jointly owned by Shell and BASF, the German chemical giant.

Iran's National Petrochemical Company (NPC) is close to sealing a politically sensitive $4.4bn (£2.3bn) deal to buy Basell, the polymer business jointly owned by Shell and BASF, the German chemical giant.

The state-owned Iranian company's highest bid is causing extra complications in the sale process, which Shell, BASF and their advisers, CSFB and Lazards, are attempting to iron out. If no solution can be found, then the underbidder, Indian group Haldia Petrochemicals, will take Basell over.

The difficulty for NPC comes because of the US government embargo resulting from the row about the Iranian nuclear programme, which the US alleges is being used to develop weapons. Though the political row appears to be easing - talk of invading Iran is no longer going around Washington - no Iranian company is allowed to own assets in the US.

Basell has significant businesses in America, but sources close to the group said these amounted to less than a 10th of Basell's total assets.

Shell and BASF are trying to decide what to do with those assets if the sale to NPC goes through. The options include retaining the businesses, parking them in a new company until the Iranian sanctions are lifted by the US, or selling them separately. A decision is likely to be made in the next few days.

The sellers also have to take a view on the political risk caused by selling Basell to Iran. Although it is felt that the US would have no legal basis for objecting to a purchase by NPC, Shell has significant US interests which might be hit by any backlash against a deal with the Iranians.

Shell and BASF are set to recoup about $1bn each from the Basell sale. It is the first in a series of disposals by Shell aimed at recouping some $10bn to $12bn. Next on the block is its 68 per cent shareholding in Intergen, the power generation joint venture with Bechtel, the US construction group. The company is said to be worth around $6bn and bidders have been invited to make an offer.

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