Repsol YPF and Borealis, one
of the world's leading producers of polyolefin plastics, have signed a Letter of
Intent to establish a new company, that will combine Borealis' and chemical
Repsol YPF's assets on the Iberian Peninsula. The new company will go into
operation on January 1st 2001.
Specifically, the new company will consist
of Repsol YPF's polyolefins assets in Puertollano and Tarragona (Spain) and
Borealis' current petrochemical site in Sines (Portugal). It will also include
Repsol YPF�'s organisation for polyolefins in Madrid and abroad. Borealis sales
organization will not be included in the new company.
With an initial
production capacity of 1.2 million tonnes/year, it will be the largest
polyolefins company in the region. Its name has yet to be decided.
Repsol
YPF's will have management responsibility for the new company, which will
function as an independent entity with its own sales and marketing activities.
The plan is for equal ownership by Borealis and Repsol YPF. Borealis will retain
propylene supplies from Sines under contract agreements in order to provide a
long-term, secure supply basis for Borealis' downstream polypropylene operations
in western Europe.
Employees currently involved in both companies'
operations, and related to the assets to be transferred, will continue their
employment in the new company.
This agreement positions Repsol YPF
through the new company, as leader in the polyolefin industry in the Iberian
Peninsula and the Western Mediterranean, giving it sufficient critical mass to
compete with the europeans top companies in this sector.
The agreement is
subject to approval by the EU commission and other relevant
authorities.
Merrill Lynch acted as exclusive Financial Advisor for both
Repsol YPF and Borealis in this operation.
Repsol YPF is a leading
international oil and gas company engaged in all activities of the petroleum
business: exploration and production, refining and marketing, chemicals and gas
and power. Repsol YPF operates in 27 countries, with a major presence in Spain
and Argentina. It owns more than 4,500 million barrels of oil equivalent in
reserves, and produces over one million barrels per day. With a refining
capacity of 1.2 million barrels per day, the company has a service station
network of over 7,200 outlets throughout the world. In addition, it sales of
natural gas amounts to 21 bcm. Repsol YPF's chemical sales including those of
the new joint-venture, amount to approximately 2.5 million tonnes per
year.
Repsol YPF shares are listed on the Spanish Stock Markets, the New
York Stock Exchange (NYSE) and the Buenos Aires Stock Exchange.
Borealis
is Europe's second-largest and the world's fourth-largest producer of polyolefin
plastics. The Borealis Group produces high-quality polyethylene and
polypropylene at the rate of over 3 million tons a year. The head office is in
Denmark but Borealis has manufacturing sites and compounding facilities in
Austria, Belgium, Finland, France, Germany, Italy, Norway, Portugal and
Sweden.
Borealis' Performance Products Division encompasses the Business
Units for Wire & Cable, Pipe and Engineering Applications. The Polyolefins
and Chemicals Division encompasses the Polyethylene, Polypropylene, and Olefins,
Phenol & Aromatics Business Units. Borealis' technology for leadership in
polyethylene and polypropylene performance is marketed under the trademark:
Borstar�.
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