London-headquartered BP has agreed to sell its global petrochemicals business to INEOS for USD 5 billion (Rs 37,754 crore), subject to customary adjustments. Multi-national oil and gas company plans to utilise the amount to strengthen its balance sheet and meet its targeted divestments plans before the scheduled date. The transaction is expected to be completed by the end of 2020, however, subject to regulatory and other approvals.
As per the deal, INEOS will shell out a deposit of USD 400 million and will pay a further USD 3.6 billion on completion. An additional USD 1 billion will be deferred and paid in three separate instalments of USD 100 million in March, April and May 2021 with the remaining USD 700 million payable by the end of June 2021.
BP, CEO, Bernard Looney, said, "This is another significant step as we steadily work to reinvent BP. These businesses are leaders in their sectors, with world-class technologies, plants and people. In recent years they have improved performance to produce highly competitive returns and now have the potential for growth and expansion into the circular economy.”
BP, chief financial officer, Brian Gilvary said, "With today's announcement we have met our USD 15 billion target for agreed divestments a full year ahead of schedule, demonstrating the range and quality of options available to us."
INEOS is a leading global chemicals company with a network spanning over 180 sites in 26 countries, employing some 22,000 staff worldwide. Over the past two decades, INEOS has acquired a number of businesses from BP, most notably the 2005 USD 9 billion purchase of Innovene.
In total, the businesses included in the transaction currently employ over 1,700 staff worldwide. These staff are expected to transfer to INEOS on completion of the sale.