BASF and Shell Announce Intention to Merge Polyolefins Businesses

N/A and Shell Petroleum N.V. ('Shell'), a holding company in the Royal Dutch/Shell Group of Companies, announced today that discussions are at an advanced stage to combine Elenac, Montell and Targor into one of the world's largest polyolefins enterprises.

Shell and BASF would each own 50 per cent of the new enterprise which would have its holding company in The Netherlands. The proposed new enterprise would become the world's largest producer of polypropylene and the fourth largest polyethylene producer. The turnover of this new enterprise would be in excess of $6 billion.

Dr. Volker Trautz, member of BASF's Board of Executive Directors and responsible for the Plastics & Fibers segment, sees the project as the logical continuation of the company's forward strategy in the polymer sector, initiated a few years ago. He also emphasised the importance of the relationship with Shell, which had proved itself over many years. He said: "The new joint venture will also profit from this partnership, and we will make sure it has the best possible starting position so that it can act independently of its parent companies." Trautz is also convinced that the proposed new joint venture will set new profitability and customer benefit standards based on its innovative potential, the depth of its product range and its technical expertise.

"The proposed merger reflects the strong relationship that exists between Shell and BASF," said Evert Henkes, Chief Executive Officer of Shell's Chemicals business. "It would bring together established technical strengths, global reach and an extensive product portfolio, which I believe shows both partners' determination to most effectively serve customers. It manifests our vision and long-term commitment to the industry."

In the opinion of Shell and BASF the agreements could be ready for signature by the end of the year after which the competition authorities will review the proposed transaction. Once discussions are completed, a more detailed announcement will be made.