FRANKFURT Aug 28 Styrolution, a
Germany-based plastics maker jointly owned by BASF
and Ineos, expects Ineos to exercise an option next
year to buy out BASF.
As part of the joint-venture agreement struck in October
2011, Ineos holds the right to buy BASF's 50 percent in
Styrolution, a maker of plastics used in car front grills, food
packaging and Playmobil toys, from February 2014 onwards.
BASF, in turn, has the right to sell its half in the world's
largest styrenic plastics maker to its British co-owner from
October next year.
"I consider Ineos to be very interested. That has been
voiced clearly," Styrolution Chief Executive Roberto Gualdoni
said at a media briefing.
The co-owners have agreed that any future transaction would
value the venture at a fixed multiple of adjusted earnings
before interest, taxes, depreciation and amortisation (EBITDA),
which the CEO said was in a range of 5-7, declining to specify.
Since the group, with 6 billion euros ($8 billion) in sales
last year, aims to boost profits further, it would be in Ineos's
interest to exercise its option early on, Gualdoni said.
Styrolution made an adjusted EBITDA of 335 million euros in
"The decision on a sale will be made depending on how much
trust there is in my words. But I believe our credibility is
quite high," the CEO said.
A spokesman for Ineos said the firm had not made any
decision yet on exercising its options.
Styrolution aims to grow its margin of adjusted EBITDA over
sales to at least 10 percent by 2020 from about 6 percent
currently by growing in emerging markets and focusing on
plastics that are tailored to customer specifications, among
The global average for EBITDA margins in the chemical
industry is 10 percent, according to Thomson Reuters StarMine
BASF and Ineos pooled their styrenics businesses in 2011 to
better compete with low-cost Asian rivals, with BASF saying at
the time it was eventually eyeing a complete exit.
Gualdoni added that an initial public offering or a sale to
another chemical maker could be on the cards for Styrolution but
such a decision would be made in 2015 at the earliest.
While the group, which competes with the petrochemicals arms
of oil majors Royal Dutch Shell and Total,
relies on organic growth to reach its 2020 targets, it is
looking for takeover targets to boost its position in some
Gualdoni described the company's presence in Asia as "a
starting position" that could benefit from an acquisition.