Ineos snaps up Borealis petrochem business in Norway

Ineos Group has agreed to pay €290m for the Borealis petrochemicals business in Norway, subject to approval from the EU competition authorities.

The acquisition follows hot on the heels of Ineos’s purchase of Norsk Hydro’s Kerling polymers business, for €670m,. It gives it full ownership of the Noretyl ethylene cracker that had been a 50:50 joint venture between Borealis and Norsk Hydro.

In addition to the 50% stake in the 570,000tpa Rafnes cracker, the Borealis assets comprise a 175,000tpa PP unit and a 140,000tpa LDPE facility, both located close to Rafnes, at Bamble. They supply the moulding, film and fibre and extrusion coating industries in northern Europe.

Last year, Borealis announced it would close its loss-making HDPE plant at Bamble.

Commenting on this latest acquisition, Ineos chairman Jim Ratcliffe said: “The addition of these facilities to our other recent investments in the region will enhance operational efficiencies and substantially improve our position in the olefins and polyolefins market.”

Ratcliffe’s additional comment that the acquisition presents important opportunities to support existing Ineos assets in the North West European ethylene network is given added focus by its current problems at Grangemouth, where a cracker supplying ethylene, propylene and butadiene is going to be out of action for three months.

Borealis says the disposal is a continuation of the restructuring of its Norwegian operations.

“The sale of our Norwegian polyolefins business is another step to increase the overall competitiveness of our European operations,” said chief executive John Taylor.

As a result of the sale, Borealis is creating an independent innovation company to take over its existing R&D centre in Bamble and to retain the existing group support functions at the location as a separate unit.

The 160 Borealis employees, from its existing staffing of 450, not affected by the sale of operations to Ineos, will transfer to the innovation company.

All 165 employees at the Noretyl cracker will be employed by Ineos once its takeover of the Borealis and Norsk Hydro polymer assets is completed. This is expected to be in the third quarter of the year.