Shell takes over Montell while forging venture with BASF
15 Jan 2000
Not to be outdone by its Nordic competitor, Shell has bought out Montedison's share of Montell, recreating the old polyolefins-dominated Shell Chemicals as a global business. Meanwhile, Shell is also about to embark on a new joint venture, pooling its polethylene interests with those of BASF.
Montell was formed in 1995 as a 50:50 joint venture combining Shell and Montedison's polypropylene businesses, and coincided with the then crisis-hit Italian firm's moves to shed its chemicals interests. Shell has now decided that it needs to globalise its chemicals business, and has therefore undertaken to pay Montedison some $2billion to take over its half of the venture.
Montell will continue to be run as a standalone company within Shell, and its current chief executive, Peter Vogtlander (a Shell veteran), will continue in the post.
The deal gives Shell control over 3.6million t/a of polypropylene capacity in 16 countries, as well as one of the leading polypropylene manufacturing technologies, Spheripol, and two advanced materials, Hivalloy and Catalloy.
Montell's polyethylene assets are to be transferred to the new joint venture between Shell and BASF, currently code-named `Marlene'. First mooted last October, the venture will include ROW (an existing joint venture between BASF and Deutsche Shell); the PE businesses of BASFand Montell; and a 50 per cent stake in Montell's Aubette cracker in France.
The deal is still subject to European Union approval, but if this is granted, `Marlene' will control some 1.4million t/a of PEcapacity across Europe, with facilities in France, the UK (at Carrington) and Germany. Like Montell, it will operate as a standalone company. The partners expect their offspring to start trading on 1 November.
Shell has also unveiled a new corporate structure for its chemicals division. Three business units - base and intermediate chemicals; performance products; and specialities and differentiated products - will set global strategy for their products and `provide advice' for Shell's network of national operating companies. Meanwhile, three regional presidents in the Americas, Europe/Africa and Asia Pacific/Middle East will oversee implementation of strategy in their regions.
