São Paulo – January 22, 2010 – Braskem announced the conclusion of negotiations for the acquisition of Quattor, which will take place through an Investment Agreement signed today between Odebrecht, Petrobras, Braskem and Unipar. The agreement will allow Petrobras to consolidate its main petrochemical assets in Braskem, which will remain a private, publicly traded company and increase its capacity to compete on a global scale.
The consolidation of the assets will position Braskem as the largest petrochemical company in the Americas in terms of thermoplastic resin (PE, PP and PVC) production capacity, elevating it to a new position in terms scale and efficiency and preparing it to face the challenges of the international market. Listed on three stock exchanges (BM&FBovespa, NYSE and LATIBEX), the company will come to have annual earnings of R$ 26 billion. With the integration between first and second petrochemical generation, its 26 plants, located in five states (São Paulo, Rio de Janeiro, Rio Grande do Sul, Bahia and Alagoas), will have the capacity to process 5.5 million tons of resin per year.
“The consolidation of the first and second generation petrochemicals, which are capital-intensive, creates the conditions for Brazilian industry to become a major player in one of the most challenging and competitive sectors – the thermoplastic resin market,” explained Bernardo Gradin,” CEO of Braskem. “Furthermore, it provides the necessary investments to keep up with national economic growth,” said Gradin. “The creation of a company with global size and vocation is aligned with Brazil’s growing insertion into the international market.”
The operation is estimated at R$ 700 million, including the amounts associated with the acquisition of the companies Polibutenos and Unipar Comercial by Braskem, which will also assume control of UNIPAR together with BNDESPAR.
Furthermore, the Association Agreement signed between Petrobras, Odebrecht and Braskem gives the latter the right of preference to participate as a partner in the projects for the Rio de Janeiro State Petrochemical Complex (COMPERJ) and Suape Petrochemical Complex in Pernambuco. Such projects, which are already underway, will significantly increase the domestic offer of basic petrochemicals and resins.
The following stages are involved in the operation: (1) the creation of a holding in which Odebrecht and Petrobras allocate shares and produce capitalization of R$ 3.5 billion; (2) Braskem will then receive a capital increase ranging from R$ 4.5 to R$ 5 billion by current Braskem shareholders, granted that Odebrecht and Petrobras would hold stake through the created Holding with R$ 3.5 billion they invest during the period (1); (3) Braskem acquisition of the Quattor shares held by UNIPAR as well as the other UNIPAR stake; (4) Braskem incorporation of the Quattor shares held by Petrobras.
The increased capital will reinforce the company’s structure, giving it improved financial flexibility to continue with its investment and internationalization program.
According to Braskem’s CEO, the integration of the modern and competitive plants, the geographic complementation and diversification (units in five different states) and that of its raw materials (naphtha, ethane, propane, HLR, refinery propane and ethanol), will ensure Braskem gains in scale, improved flexibility and boosted operational efficiency.
The Investment Agreement will be sent for evaluation by Brazil’s Administrative Economic Defense Council (CADE), with the voluntary offer of an Agreement for Operation Reversibility (APRO).
Gradin stated that Braskem will move forward with its internationalization project, combining its vocation for growth with its capacity to invest and compete globally. “We will see a positive impact in terms of strengthening relations with our Clients through increased integration in the production chain, access to higher added value services, innovative technologies and consistent investments in research and development.”
The company will uphold best corporate governance standards in force in the international market, which are founded on: transparency and autonomy of the executive management; the search for consistent results for shareholders; a commitment to improving the competitiveness of the entire production chain and promoting sustainable development.
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