Abu Dhabi firm to acquire Nova Chemicals

Tuesday, Apr 28, 2009

International Petroleum Investment Co (IPIC), an arm of the government of Abu Dhabi, UAE, that also controls the Austrian polyolefins firm Borealis, has agreed to pay $ 2.3 billion for Nova Chemicals, the Alberta-based maker of polyethylene and styrenic resins. Nova's key asset is its petrochemical complex at Joffre, Alberta (USA).

Announcing the deal, Jeffrey M Lipton, CEO, Nova Chemicals, said that the company had been considering a number of options, including a private equity deal, borrowing more money, or issuing more bonds. "Compared to a wide range of alternatives our company has explored over the number of months we have been doing this work, the IPIC agreement was assessed to clearly be the best alternative for Nova Chemicals," he added.

With sales of $ 7.4 billion last year, Nova is North America's fifth-largest producer of ethylene and polyethylene. The company's greatest strength is its massive ethylene operations in Joffre, Alberta, which are based on low-cost natural gas in the region. It also operates an ethylene cracker in Corunna, Ontario. A polystyrene joint venture with Ineos and a specialty styrenics unit have struggled in recent years.

Nova will retain its name. As planned, Christopher D Pappas, Nova's chief operating offer, will take the reins from Lipton in May.

Source: alibaba