UPDATE 1-Braskem to buy Argentine-Brazilian unit of Belgium's Solvay
By Cesar Bianconi
SAO PAULO Dec 17 (Reuters) - Braskem SA, Latin America's largest petrochemical company, reached a deal on Tuesday to buy plastic maker Solvay Indupa, largely by taking on debts of the Argentine-Brazilian unit of Belgium's Solvay SA , a unit valued at $290 million.
A securities filing confirmed a Reuters report earlier on Tuesday that the Brazilian company would acquire the company with plants making PVC resins and caustic soda in Brazil's Sao Paulo state and Argentina's Buenos Aires province.
The deal, which represents Braskem's first move into production in Argentina, comes as the southern neighbor is courting foreign companies to develop the Vaca Muerta field, one of the biggest shale reserves in the western hemisphere.
"The acquisition ... reinforces a strategy of combining investment with new alternatives for access to competitive raw materials," Braskem said in the filing.
The company is building a $4.5 billion plant in Mexico and studying options for investment in the United States as it chases access to cheap natural gas rather than the more expensive naptha fuel stock it uses at most existing plants.
Chief Executive Carlos Fadigas said Braskem would acquire Solvay Indupa mainly through assuming its debts, along with a small cash disbursement.
In the contract signed on Tuesday, Braskem agreed to buy 70.59 percent of the company from its controlling owner. Braskem will also offer to buy up the 29.41 percent of the company floated on the Buenos Aires stock exchange.
The deal may also advance Braskem's mission to become "the global leader in sustainable chemistry" by the end of the decade. In 2007, Solvay Indupa began studying how to produce PVC from sugarcane-based ethanol in a process similar to Braskem's so-called "green" polyethylene production.