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 CALGARY, Alberta, Dec. 30 /PRNewswire/ -- Companies of the Royal Dutch/Shell Group and Montedison S.p.A. today announced the signing of an agreement to merge the major parts of their polypropylene and polyethylene businesses. In Calgary, Shell Canada Ltd. announced an agreement to sell its polypropylene business to the new enterprise formed with the merger, subject to Canadian regulatory approvals.
 The sale by Shell Canada Ltd. will include its polypropylene business, consisting of a polypropylene plant in Sarnia, Ontario, as well as related marketing, sales and research activities in Canada. The financial impact will be disclosed when all material conditions have been met and when normal closing adjustments have been determined. The sale will not impair earnings in 1994. Shell Canada will continue to own and operate its polypropylene business until the transaction closes. If for some reason the sale does not close, Shell plans to continue operation of the business.
 The polypropylene business will be sold as a "going concern," and it is expected that most of Shell's Sarnia polypropylene plant employees and those directly supporting the polypropylene business in areas such as marketing, sales and research, will be offered employment by the new owners. About 200 Shell Canada people will be involved.
 The sale will not include Shell Canada's oil refinery in Sarnia, which is located adjacent to the polypropylene plant.
 LONDON: Companies of the Royal Dutch/Shell Group (Shell) and Montedison S.p.A. signed an agreement today to merge the major parts of their polypropylene and polyethylene businesses, including related downstream fabrication activities. The transaction, which is expected to be completed in 1994, will result in the formation of a new enterprise which will be equally owned by Shell and Montedison.
 The new enterprise will include substantially all of Montedison's and the large majority of Shell's polyolefins businesses, with the exception of certain Shell joint venture activities or interests in Germany, Singapore and Japan and Shell Oil Co.'s polyolefins activities in the United States. It will include also some associated feedstock assets as well as polyolefins research and development activities.
 This step follows agreement on the major elements of the transactions which form the basis of the merger and completion of the necessary due diligence audits. Filing and submissions are being made to EC, United States, Canadian and other regulatory authorities, and completion of the transaction will follow receipt of the required regulatory approvals.
 Montedison (through its subsidiaries Himont Inc. and Moplefan S.p.A.) is a leader in polyolefins technology with a diversified product portfolio, including a range of advanced polyolefin materials.
 Shell companies bring to the new enterprise their broad product range along with some associated olefin feedstocks and a global marketing network.
 The merger presents a unique opportunity for creating synergies, including the critical mass needed to sustain the research and development of the new family of advanced polyolefin materials, and enhanced prospects for growth which will provide significant benefits for customers worldwide.
 The resulting enterprise will have a world-wide capacity of approximately 3.3 million tons of polypropylene (18 percent of global production capacity) and 0.7 million tons of polyethylene.
 The new enterprise will be set up and operated as a global, stand- alone corporate entity with its own management and workforce.
 The head office of the enterprise will be located in the Netherlands, and with major regional offices in Brussels, Belgium (for European and International activities) and in Wilmington, Del., (for North American activities).
 -- The major polyolefin products which are the subject of this merger are the thermoplastics polyethelene and polypropylene, plus the developing advanced polyolefin materials family.
 -- Pre-merger, Shell companies collectively are major polypropylene producers operating wholly owned plants in the United Kingdom, France, the Netherlands and Germany, the U.S.A., Canada and Australia. In addition, they also have investments in several polyolefin manufacturing joint ventures or companies in Germany, France, Brazil, Argentina, Singapore and Japan.
 -- Pre-merger, Shell has 1.2 million tons of wholly owned and equity owned polypropylene capacity (6 percent of world polypropylene production capacity) and 0.5 million tons of polyethylene capacity.
 -- All existing Shell joint venture and corporate shareholdings will be included in the Enterprise with the exception of: ROW (Rheinische Olefinwerke GmbH. 50/50 Shell/BASF); TPC (The Polyolefin Co. (Singapore) Private Ltd., Shell shareholding 30 percent); MYKK (Mitsubishi Yuka K.K., Shell shareholding 20 percent) and Shell Oil Co.'s polyolefin activities in the USA.
 -- Montecatini S.p.A., part of the Montedison Group, operates in the chemical, engineering and energy sectors.
 -- Montedison, S.p.A. is the industrial holding company of the Ferruzzi Group which is a leading international group with worldwide turnover of approximately US$20 billion and with interests in chemicals, engineering, energy, food and agro-industry, and insurance.
 -- Himont Inc. was formed in 1983 to combine the polypropylene interests of Montedison and Hercules incorporated. By 1990, Montedison was the 100 percent owner of Himont through Montecatini.
 -- Himont, headquartered in Wilmington, is the world's largest polypropylene producer with 2.3 million tons of wholly owned or equity share polypropylene capacity. This represents about 12 percent of worldwide production capacity.
 -- Himont's manufacturing activities are located in 11 countries throughout the world - in Europe (Italy, Belgium, Germany, United Kingdom), North America (USA, Canada, Mexico), South America (Brazil) and the Far East (Taiwan, Thailand, Malaysia). Moplefan is the downstream polypropylene film and fiber fabrication group and is also one of the major players in this field with plants in Italy, Belgium and United Kingdom. Himont's two major research centres are at Ferrara, Italy, and Elkton, USA.
 -- Himont's polyolefins business, and the downstream Moplefan organization, have proceeds approaching US$2 billion. Shell companies' business turnover contribution to the new enterprise is more than US$1.0 billion.
 -- Setting aside the Shell polypropylene capacities not included in the merger, the world-wide capacities (including contributed shares in joint ventures) are: Polypropylene 3.3 million tons (Himont 2.3 million tons, Shell 1.0 million tons) plus substantial investments in compounding operations, downstream activities, R&D facilities and laboratories.
 -- The Enterprise will have approximately 18 percent of global polypropylene manufacturing capacity with manufacturing facilities in: North America - 1.2 million tons (USA, Canada, Mexico); Europe - 1.6 million tons (Belgium, France, Germany,Italy, Netherlands, United Kingdom); Other regions - 0.5 million tons (Argentina, Australia, Brazil, Malaysia, Taiwan, Thailand)
 -- Polyethylene capacity is currently located in Europe 0.5 million tons (Shell - France and United Kingdom). Himont will bring an additional 0.2 million tons capacity expected on stream in 1994, in the USA.
 -- Downstream companies included in the merger are:
 From Montedison:
 Moplefan SpA, Moplefan UK, Moplefan Benelux and their
 subsidiaries - Francoplast, Moplefan Sud, Retiflex,
 Texmet, Lamezia Speciality Film, Lameskin, Lamespun and
 Kolon Merak Fibre Co (50 percent JV).
 From Shell:
 Don & Low, UK
 Shorko, Australia
 Poly Pacific Pty (50 percent JV), Australia
 Poliderivados SA Technologia de Polimeros (48 percent JV),
 -0- 12/30/93
 /CONTACT: Jan Rowley, Manager, Products, Public Affairs, Shell Canada, Calgary, 403-691-5505; or Eric Nickson, London, 071 934 4488; or Jon Barnden, London, 071 934 3045/

CO: Shell Canada Ltd.; Montedison S.p.A.; Himont Inc.; Moplefan S.p.A. ST: Alberta IN: OIL SU: TNM

MF -- LA010 -- 7998 12/30/93 10:10 EST
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Publication:PR Newswire
Date:Dec 30, 1993

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