NOVA Chemicals Completes $635-Million Acquisition Of Huntsman's Styrenics Business
The new purchase price has been set at US$637 million, plus working capital. This price reflects the withdrawal of Huntsman's EPS plants at Mansonville, QE and Peru, IL from the transaction and other negotiated adjustments totaling U.S. $107 million and associated working capital. The two plants represented about 10% of the total Huntsman polystyrene production capacities. N/AChemicals president and CEO Jeffrey Lipton said, "This acquisition dramatically upgrades our styrenics business. Now that the deal has closed we will work quickly to integrate operations and capture synergies."
In the transaction, NOVA Chemicals acquires one styrene manufacturing plant with 1.25 billion lb of annual production capacity and six polystyrene plants, four in North America and two in Europe, with a combined 1.8 billion lb of annual capacity. (See the attached table for an overview of the facilities that make up NOVA Chemicals' styrenics business.) "We are poised to deliver rapid cost reductions and to begin to build the most customer-oriented and cost-efficient styrenics business in the world," said Lipton.
Lipton is sticking to NOVA's original estimate of $105 million in cost savings when the acquisiton is complete. Savings and improvements will come from:
- rationalized operations and facilities
- reduced information technology, selling, general and administrative expenses
- streamlined product offerings and logistics
- broader deployment of advanced technologies and new products
Huntsman has become a major investor in NOVA Chemicals by investing U.S. $198 million in the form of preferred shares. Jon Huntsman, president of Huntsman Chemical, notes that this makes the company the largest single investor in NOVA.
| NOVA Chemicals Styrenics Capacities (million lb/yr) | ||
|---|---|---|
| STYRENE | ||
| Former Huntsman facility | NOVA facility | New NOVA capacity |
| Bayport, TX 1,250 | Sarnia, ON 950 | |
| Channelview TX 800(a) | ||
| Total 1,250 | 1,750 | 3000 |
| SOLID POLYSTYRENE | ||
| Former Huntsman facilities | NOVA facilities | New NOVA capacity |
| Belpre, OH 480 | Decatur, AL 395 | |
| Carrington, UK 400 | Montreal, QE 130 | |
| Chesapeake, VA 400 | Springfield, MA 310 | |
| Joliet, IL 230 | ||
| Peru, IL 120 | ||
| Total 1,630 | 835 | 2,465 |
| EXPANDABLE POLYSTYRENE (EPS) | ||
| Former Huntsman facilities | NOVA facilities | New NOVA capacity |
| Ribecourt, France 200 | Beaver Valley, PA 405(b) | |
| Painesville, Ohio 70 | ||
| Total: 200 | 475 | 675 |
(a) Consists of a 400-million-lb equity interest in Lyondell's PO/SM II plant at Channelview, TX, plus a 400-million-lb long-term tolling arrangement at Channelview.
(b) Includes 130 million lb of Dylark engineering resin, Arcel moldable foam resin and Dylene polystyrene.