Mar 30 2004
Lyondell Chemical Company and Millennium Chemicals Inc. have announced that their Boards of Directors have approved, and the companies have executed, a definitive agreement for a stock-for-stock business combination of the companies, expected to be tax-free to the shareholders of Millennium and the companies. The transaction will create North America's third-largest independent, publicly traded chemical producer with combined pro forma 2003 revenues of more than $11 billion and market capitalization of nearly $4 billion.
After the close of the transaction, the company will be called "Lyondell Chemical Company" and will be headquartered in Houston, Texas. Dan F. Smith will continue as president and chief executive officer, and Dr. William T. Butler will continue as the independent chairman of the Lyondell Board of Directors. Two independent members of Millennium's current Board will join the Lyondell Board, effective at the time of the closing.
The transaction combines two U.S. chemical companies that are well positioned globally, with leading positions in propylene oxide and derivatives, titanium dioxide (TiO2) and acetyls. And, through their Equistar joint venture, a major North American producer of ethylene, propylene, polyethylene and aromatics, they have significant leverage to the petrochemical cycle, providing opportunity for the combined company's shareholders to take full advantage of the recovery in the petrochemical cycle. The combined company will operate in 16 countries and employ about 10,000 people worldwide.
Millennium is the second-largest producer of TiO2 in the world, in an industry in which the five largest producers represent approximately 75 percent of worldwide capacity. Millennium has a larger geographic footprint than any other TiO2 producer, with competitive production facilities on four continents. The TiO2 business has a strong technology and customer base.
The acetyls business is a significant ethylene consumer and, as such, integrates very well with Equistar's petrochemical business. Millennium holds the number-two North American capacity position for acetyls and is number three in the world. Millennium utilizes proprietary, advantaged technology at its world-scale manufacturing facility in La Porte, Texas.