#BP sells petrochemicals business to Ineos for $5 billion

BP is selling its petrochemicals arm to Ineos for $5 billion as part of the fossil fuel giant’s efforts to reposition itself as a more sustainable energy company.

The deal announced Monday achieved BP’s goal of dumping $15 billion in assets a year ahead of schedule. BP decided to sell the business — which makes chemicals used in plastics, paints and pharmaceuticals — because it would have been expensive to grow and had limited overlap with the rest of the company, according to chief executive Bernard Looney.

“As we work to build a more focused, more integrated BP, we have other opportunities that are more aligned with our future direction,” Looney said in a statement. “Today’s agreement is another deliberate step in building a BP that can compete and succeed through the energy transition.”

Looney acknowledged that the deal “will come as a surprise” and said BP will do its best to “minimize uncertainty.” The businesses being sold have more than 1,700 employees who are expected to transfer to Ineos once the deal is complete, BP said.

Ineos — a London-based chemical giant owned by British billionaire Jim Ratcliffe — previously paid $9 billion for most of BP’s petrochemicals business in 2005. To take over the rest of it, the company will pay BP an initial $400 million deposit followed by another $3.6 billion on completion of the deal, which is expected by the end of this year.

Ineos will shell out the remaining $1 billion by the end of June 2021, BP said. The sale will give Ineos control of BP’s manufacturing plants in the US, Europe, Asia and Trinidad & Tobago, as well as its petrochemical technology and licenses, according to a news release.

BP announced the sale as it grappled with the coronavirus pandemic, which has forced the company to slash nearly 10,000 jobs and cut the value of its assets by up to $17.5 billion amid a plunge in oil prices. The crisis came as BP worked to turn itself into a more environmentally friendly company with the goal of cutting its carbon emissions to “net zero” by 2050.

With Post wires