MUMBAI Nov 22 India's Reliance Industries
(RELI.BO) is offering about $12 billion to buy a controlling
interest in bankrupt chemical company LyondellBasell Industries
[ACCEIN.UL] to create one of the largest petrochemical firm in
the world, two sources with direct knowledge of the deal said.
"The offer is in the vicinity of about $10 to $12 billion,"
one source said, while another said it was around the upper end
of the band. The two sources declined to be named as they are
not authorised to speak to the media.
The deal, if closed, will make it one of the largest
overseas acquisitions by an Indian company. In 2007, Tata Steel
(TISC.BO) bought Anglo-Dutch Corus steel maker for $13 billion.
On Saturday LyondellBasell said Indian energy giant
Reliance Industries has made a non-binding cash offer to buy a
controlling interest and the offer represented a potential
alternative to its previously filed reorganisation plan to
emerge from Chapter 11 bankruptcy.
Reliance said it had made a preliminary non-binding offer
to acquire, for cash, a controlling interest in LyondellBasell
upon its emergence from Chapter 11.
"The offer is preliminary and subject to customary
conditions including conduct of due diligence, documentation
and receipt of sufficient creditor support," it said.
Both Reliance and LyondellBasell did not disclose the size
of the offer in their statements.
Bank of America Merrill Lynch is among the advisors for
Reliance, they said.
Reliance, India's largest conglomerate, has been looking to
expand, taking advantage of low valuations to delve into
The company is aiming to attain global scale for its
conventional energy platform -- petrochemicals, refining and
oil and gas exploration -- and invest in its new businesses
such as retailing and alternative energy, chairman Mukesh
Ambani said this week at the company's annual meeting of
In September, Reliance raised about $660 million in a share
sale that analysts said was likely to help the firm make
It has $4 billion in cash, $8bn in treasury stock that can
be sold and if it doubles its current net debt-to-equity of
0.35x it can borrow another $10bn, Macquarie said in a recent
Luxembourg-based LyondellBasell filed for bankruptcy
protection in January, unable to meet its debt obligations
after demand dropped for petrochemicals products during the
global economic downturn.
The company, owned by investor Len Blavatnik through New
York-based Access Industries, took on billions of dollars of
debt obligations when an Access Industries-led group bought the
company in 2007.
(Reporting by Narayanan Somasundaram & Pratish Narayanan;
Editing by David Fox)