Brazil’s Unipar makes non-binding offer for majority stake in Braskem

HOUSTON (ICIS)–Unipar Carbocloro made a non-binding proposal to acquire control of the Brazilian polyolefins producer Braskem, the vinyls producer said late on 10 June.

Unipar sent the proposal to Novonor, which owns 50.1% of the voting shares of Braskem and 38.3% of its total share capital.

Novonor has been trying to sell its shares in Braskem for years. It needs to make some kind of deal to fulfil the commitments it made to creditors before and during its bankruptcy.

Under its proposal, Unipar would contemplate a partial payment to the creditor banks and new conditions for the remaining debt balance, the company said. In addition, the proposal will consider the possibility of Novonor maintaining an indirect minority interest in Braskem.

To obtain a controlling stake in Braskem, Unipar would launch a public offer to acquire the commons shares as well as the class A and Class B preferred shares. It would also launch a tender offer to acquire up to all of the shares traded on the New York Stock Exchange.

At an appropriate time, Unipar will negotiate with Petrobras. The Brazilian state-controlled energy producer owns 47.0% of Braskem’s voting shares and 36.1% of its total share capital.

Unipar did not disclose how it would finance the acquisition.

BRASKEM IS MUCH LARGER THAN UNIPAR
Braskem is much larger than Unipar. In 2022, Braskem had total assets of reais (R) 88.0bn ($18.0bn) and sales of R96.5bn.

Braskem is Brazil’s sole polyolefins producer. It also makes olefins and polyvinyl chloride (PVC) in the country. Braskem has plants in the US and Europe. It is a majority owner of a joint venture that makes polyethylene (PE) in Mexico.

By contrast, Unipar’s plants are limited to Cubatao and Santo Andre in Brazil’s Sao Paulo state and to the Bahia Blanca petrochemical hub in Argentina. The company makes chlor-alkalis and PVC.

In 2022, Unipar had total assets of R5.56bn and revenue of R7.27bn.

It is unclear how Brazil’s antitrust authority, CADE, would respond to the deal, since it would make the combined company the sole producer of PVC in Brazil.

EARLIER BID BY ADNOC AND APOLLO
Earlier this year, the Abu Dhabi National Oil Co (ADNOC) and the private-equity firm Apollo had made an offer to Novonor for Braskem.

The offer from ADNOC and Apollo could open up synergies, because another Abu Dhabi state-controlled entity, Mubadala, owns a large refinery in Camacari, Bahia state in Brazil. Camacari is one of Brazil’s petrochemicals hubs, where Braskem owns several plants.

A successful deal would expand Abu Dhabi’s presence in the Americas through its participation in various ventures.

($1 = R4.88)