Petrobras, Ultra Group and Braskem conclude deal to purchase Ipiranga Group
In one of the biggest transactions ever seen in Brazil, Petrobras, the Ultra Group and Braskem have reached an understanding to purchase Ipiranga Group businesses, consolidating and increasing petrochemical and fuel distribution sector businesses.
The transaction is worth
approximately US$ 4 billion.
By acquiring the
Ipiranga Group businesses, the three companies reinforce their
commitment to growth in Brazil, Rio Grande do Sul and the same
stakeholders targeted by Ipiranga: the shareholders, employees,
partners, community and consumers.
The
Ipiranga Group,
one of the largest and most traditional in Brazil, operates in
the oil refinery, petrochemical and fuel distribution sectors.
Last year it registered R$30 billion in net revenues, with Ebitda
at R$1 billion and net earnings of R$534 million.
Petrobras'
president, JoseSergio Gabrielli de Azevedo, said the deal is in
line with the company's strategic plan, reinforcing its active
presence in the Brazilian petrochemical industry, in which it
already has important holdings. To Gabrielli, "Petrobras
intends to have a more relevant role in petrochemicals than it
has had in the past few years. The Ipiranga negotiation is yet
another step in the strategy of consolidating important economic
groups in Brazil, with a relevant Petrobras presence in them.
From the downstream viewpoint, the executive also highlights the
operation is important as it increases the company's North,
Northeast, and Midwest network synergy.
Pedro
Wongtschowski, the Ultra Group president, emphasized the growth
that is expected with the transaction. "With this
incorporation, we take-on important assets, committed
professionals and, moreover, the Ipiranga flag, which is among
Brazil's ten most valuable brands and one of the country's most
respected companies. With the acquisition, we significantly
boosted our operations in the fuel distribution area, now holding
two of the sector's main brands: Ultragaz and Ipiranga. It is an
investment in the fuel, biofuel, and in the Brazilian markets.
Braskem's
president, JoseCarlos Grubisich, said the Rio Grande do Sul
group's incorporation is a water divider in the strategy at the
company he leads: "we are among the world's top ten
petrochemical companies. We are committed to Brazil, to Corporate
Governance, to and sustainable development.
"This new
petrochemical sector consolidation brings an important growth
potential to Braskem, with a new competitiveness and
profitability benchmark for our business," concluded
Grubisich.
Transaction procedure
The first stage involves Ultra Group acquisition of the shares
held by the families controlling the Ipiranga Group. The Ultra
Group will then make a public offering to purchase common shares
held by Ipiranga Group minority shareholders.
In the third step, Braskem and Petrobras will submit offers to
shareholders to delist Copesul.
In the fourth step,
the Ultra Group will incorporate preferred shares held by
Companhia Brasileira de Petrleo Ipiranga (CBPI), Distribuidora de
Produtos de Petrleo Ipiranga (DPPI) and Refinaria de Petrleo
Ipiranga (RPI) minority shareholders, who will receive preferred
shares in Ultrapar.
In the fifth and
final step, petrochemical assets will be sold
and handed over to Braskem and Petrobras. Fuel distribution
businesses absorbed by Petrobras will reinforce the company's
distribution activities in the North East, North and Midwest.
The assets will be distributed as follows:
Fuel distribution sector
Refining
Details of this transaction are included in the Relevant Fact issued this morning for Brazilian Securities Commission (CVM) consideration. The same information was filed with the Securities and Exchange Commission (SEC), the New York Stock Market (NYSE), Latibex in Madrid and the Buenos Aires Stock Market (MERVAL).
The transaction is
subject to regulatory approval in Brazil from the Economic
Defense Board (CADE), Economic Law Secretariat (SDE) and the
Economic Oversight Secretariat (SEAE).
In the fuel
distribution sector, the Ultra Group already owns the leading GLP
brand, Ultragaz, and will incorporate a highly significant brand
into its business, Ipiranga. This will result in a significant
increase in its sector presence based on best corporate
governance and management practices.
The petrochemical sector, Braskem will strengthen its Latin
American market leadership in thermoplastic resins, increasing
its stake in Copesul and advancing its strategy of building
growth by creating value.
Ipiranga's historical commitments to Rio Grande do Sul and to
Brazil will be upheld by Petrobras, the Ultra group and Braskem.
The company's social, cultural and environmental activities and
programs will also remain in place.
Petrobras, Ultra, Braskem to buy Brazil's Ipiranga for $4 billion
Brazilian oil giant
Petrobras, petrochemicals company Braskem and energy holding
Grupo Ultra said Monday they had agreed a joint deal to buy
Brazil's second-largest oil company, Grupo Ipiranga, in a deal
worth $4 billion.
In a presentation Monday, Petrobras said it would spend $1.3
billion to buy a stake in Grupo Ipiranga, while Braskem will
spend $1.1 billion and Grupo Ultra will pay for its stake by
issuing 52.8 million shares.
The deal is expected to close by the end of the year, and in
several stages, the buyers' group said.
Ultra Group will acquire all of the shares of Grupo Ipiranga,
later passing stakes on to Petrobras and Braskem.
"Petrobras is growing its role in Brazilian petrochemicals
and consolidating its position in distribution (of fuels),"
Petrobras CEO Jose Gabrielli said in a statement Monday.
Petrobras said the buyers' group would divide Ipiranga's more
than 4.200 service stations around Brazil, as well as its 730,000 mt/yr
petrochemicals capacity, its 17,000 b/d refining capacity and other assets, including
natural gas distribution and oil and gas exploration concession
stakes.
The buyout marks a major consolidation for Brazil's hydrocarbons
industry, as the five Brazilian families that control the 70-year-old
Ipiranga Group agree to sell their interests to some of Brazil's
biggest energy and petrochemicals players.
The buyers' group said Grupo Ultra would take control of
Ipiranga's network of service stations in the industrialized
south and southeast of Brazil, where fuel consumption is by far
the highest in the country.
Ipiranga S.A
One of Brazil's largest privately held companies, Ipiranga S.A. focuses on the domestic oil and petrochemical sectors. The company operates through the following primary divisions: Companhia Brasileira de Petróleo Ipiranga (CBPI); Distribuidora de Produtos de Petróleo Ipiranga (DPPI); Refinaria de Petróleo Ipiranga S.A. (RPISA); Ipiranga Petroquímica; Ipiranga Comercial Química; and others. Ipiranga also holds stakes in rival Copesul, among others. The company is one of Brazil's top three oil refiners--although far smaller than state-owned Petrobrás, which has long operated a near-monopoly on the country's refining market. Ipiranga is also in the top three in the distribution market, particularly through its network of nearly 3,500 Ipiranga gasoline stations. The company's active implementation of a franchising strategy, adding a variety of new services and amenities, such as convenience stores and the like, in its service stations, has contributed strongly to that operation; these services account for as much as 15 percent of the group's total sales, which topped BRL 21 billion ($6.9 billion) in 2003. Unable to compete with Petrobrás in the refined oil market, Ipiranga has shifted its focus to lubricants and related products, and also has targeted expansion in the GNV (vehicular natural gas) arena. Through Ipiranga Petroquimica, the company is a leading Brazilian producer of petroleum derivatives, such as polypropylene, solvents, and asphalt, among other products. Although the Ipiranga holding company remains privately held (and owned in part by the founding families), the company's DPPI, CBPI, and RPISA subsidiaries are all listed on the Brazilian stock exchange, Bolsa de Valores do Rio de Janeiro.Ipiranga Petroquimica produces four thermoplastic resins present in several day-by-day products.
The High, Medium and Linear Low Density Polyethylenes (HDPE, MDPE and LLDPE), besides Polypropylene (PP), are produced in the five industrial plants in the Petrochemical Complex of Triunfo-RS.
Ipiranga Petroquimica was founded in 1976 and it was first called Polisul Petroquimica. Hoechst (Germany), Petroquisa (state owned company) and Empresas Petroleo Ipiranga (one of the largest private company in Brazil) were the only Polisul shareholders.
It was in 1992 that Ipiranga and Hoechst bought Petroquisa's shares, taking over the control of Polisul. By that time, each shareholder had 50% of the company.
By the year 1997, Hoechst shareholders decided to focus their investments in science and health business. That was the opportunity when Ipiranga bought Hoechst shares and the name Polisul Petroquimica was changed to Ipiranga Petroquimica (now 100% owned by Empresas de Petroleo Ipiranga).
The petrochemical site of Triunfo (South Brazil) has many companies but Ipiranga was the first one to start up in 1982 (together with the cracker - COPESUL). It first began with a HDPE 60.000 ton/year capacity.
In 1986, the industrial plant was debottlenecked in order to produce 100.000 ton/year.
In 1990, a second industrial plant was built and it raised the HDPE production capacity to 220.000 ton/year.
The third unit to start up was built in 1996, reaching 350.000 ton/year HDPE production capacity.
The 150.000 ton/year PP plant and the 150.000 ton/year HDPE/LLDPE swing plant started producing in 1999.
In its Brazilian site (Triunfo), Ipiranga is able to produce 150.000 ton/year of PP, 400.000 ton/year HDPE and 150.000 ton/year HDPE/LLDPE in its five (05) petrochemical units.
Ipiranga Group 29,46 % Braskem Odebrecht Group 29,46% Petroquisa 15,63% Others* 25,45% * Banks, pension funds, other investors.
Ultrapar Participações S.A. is one of Brazil's most solid conglomerates. It unites three different companies, each with a prominent position in its own segment: Ultragaz, the leader in Brazil's distribution market for Liquid Petroleum Gas (LPG), with a 24% market share; Oxiteno, the largest producer of specialty chemicals in Brazil and the only manufacturer of ethylene oxide and its main derivatives in Mercosur area (comprising Brazil, Argentina, Paraguay and Uruguay); and Ultracargo, a leading provider of integrated road transport, storage and handling services for chemicals and fuels.
Ultrapar was incorporated on December 20, 1953 and traces its origins to 1937, when Ernesto Igel established Companhia Ultragaz and introduced LPG for home cooking in Brazil. It also pioneered the development of the petrochemical industry in Brazil, which led to the founding of Oxiteno S.A Indústria e Comércio in 1970 at the newly established Mauá Petrochemical Complex in São Paulo.
The company currently
employs more than 6,500 people, operating in Brazil and Mexico.
The LPG operation is present in every state, excluding the Amazon
region, reaching more than 10.5 million homes. Oxiteno supplies a
broad range of market segments, particularly agricultural
chemicals, food, cosmetics, leather, detergents, packaging for
beverages, thread and polyester filaments, brake fluids,
petroleum, paints and varnishes. Ultracargo is a leading provider
of integrated logistics for chemicals and fuels, with 21% of
Brazil's tank storage capacity for chemical products. Ultracargo
accounts for approximately 71% of all tank capacity for liquids
at the Aratu terminal in the State of Bahia, which serves South
America's largest petrochemical complex.
The combined net revenues
of these three businesses in 2005 amounted to R$ 4.7 billion,
with EBITDA of R$ 546 million, and net income of R$ 299 million.
Since 1998 (the last year before the Company's IPO), Ultrapar has
reported an annual average compound growth of 18% in EBITDA terms
and 31% in net income terms.
LPG
Distribution:
Ultragaz is the leading distributor of liquid petroleum gas (LPG)
in the Brazilian domestic market, with a 24% market share. It
operates in the South, Southeast, Central West and Northeast of
the Country, catering to all market segments - residential,
commercial and industrial.
Chemical and Petrochemical: Oxiteno is the sole Brazilian producer of ethylene oxide, ethylene glycol, ethanolamines, glycol ethers and methyl-ethyl-ketone. Oxiteno is also a major producer of specialty chemicals. Oxiteno's products are used in many growing domestic and international industries, including polyester, packaging, paints, varnishes and cosmetics.
Logistics
of oils and chemical products: Ultracargo is the Brazilian
market leader in chemical products and fuels logistics. The
company offers transportation solutions using its own and
third-party fleets as well as storage services through
warehousing facilities at port terminals and rail junctions for
the transportation of chemical products. Transportation services
include integrated multi-modal transportation as well as
receiving and dispatching customers' goods. The company also
offers ship loading and unloading services, pipeline operations,
logistics programming and installation engineering.
2007/8/13 Bloomberg Notice Unipar 拡張
Petrobras, Unipar Plan New Brazilian Chemical Company
Petroleo Brasileiro SA, Brazil's state-controlled oil company, and União de Industrias Petroquimicas (Unipar) are in talks to join their stakes in Brazilian plastics and chemical plants into a single company.
The new company, to be called Cia. Petroquimica do Sudeste (CPS), will control factories producing thermoplastic resins and basic petrochemicals in Brazil's industrialized southeast, Petrobras, as the Rio de Janeiro-based oil company is known, said in a statement on its press Web site. Unipar, as Petrobras's prospective partner is known, will control the new company.
``We want to simplify and consolidate the Brazilian petrochemical industry so it can compete on a world scale,'' Petrobras Chief Financial Officer Almir Barbassa said in an interview. ``Right now, the Brazilian petrochemical industry has scale in Brazil but not internationally.''
The talks follow Petrobras's agreement to pay 2.7 billion reais ($1.4 billion) for Suzano Petroquimica SA on Aug. 3. The purchase, expected to be complete by year end, is part of Petrobras's plan to expand its petrochemical holdings so it can earn more from rising oil output, Chief Executive Officer Jose Sergio Gabrielli said at the time.
Petrobras, Unipar and Suzano previously were partners in petrochemicals plants in Sao Paulo and Rio de Janeiro, Brazil's two most industrialized regions. The plants include Petroquimica Uniao SA, Petroflex SA and Rio Polimeros SA.
Petrobras will invite other companies and investors in Brazil's chemical industry, such as the state development bank, BNDES, to participate in the new company, Jose Lima de Andrade Neto, head of Petrobras's chemical unit, told reporters today in Rio de Janeiro.
Petrobras and Unipar plan to sign an agreement within 90 days on how the new company will be structured, Petrobras said.
Unipar is controlled by Vilha Velha SA Administracao e Participacoes, a holding company controlled by Brazil's Geyer family.
NOTICE TO THE MARKET
Petroleo Brasileiro S.A. - PETROBRAS and UNIPAR - Uniao de Industrias Petroquimicas S.A. hereby announce that they have started negotiations on the constitution of Companhia Petroquimica do Sudeste (hereinafter “CPS”). CPS will aggregate PETROBRAS and UNIPAR assets for basic petrochemicals and thermoplastic resins in the Southeast of Brazil in order to achieve global production scale and a greater competitiveness, both key issues in this sector.
In the evaluation of the assets that will make up CPS, identical assumptions, criteria and principals will be applied, always recognizing and respecting the rights of UNIPAR, PETROBRAS and the other signatories of the Shareholders’ Agreements of Petroflex and RioPolimeros, including, in the latter case, Petroquisa, in order to acquire the shares of said companies, as a result of the acquisition, by PETROBRAS, of the controlling shares in Suzano Petroquimica S.A..
UNIPAR will be the controlling shareholder of CPS, retaining the majority of the company’s voting capital, while PETROBRAS will have an important role as a CPS shareholder. Thus PETROBRAS and UNIPAR will enter into a Shareholders’ Agreement, which will ensure that CPS will be supported by professional management, in line with the best corporate governance practices adopted by large nationally-owned publicly-held companies.
PETROBRAS and UNIPAR will make their best efforts to entering into an Investment Agreement within not more than 90 days of this date, establishing the conditions for the constitution of CPS.
Uniao de Industrias
Petroquimicas S.A. (UNIPAR) announces that on June 25, 2007 it
entered into the following legal transactions with Dow Brasil S.A.
(DOW):
(i) Irrevocably pledged to acquire 6,500,000 common shares and
6,500,000 preferred shares issued by Petroquimica Uniao S.A.,
owned by DOW(13% of voting capital and 12.97% of total capital);
(ii) Acquired 277,372 common shares and 277,372 preferred shares
(0.55% of PQU's voting and total capital ) issued by Petroquimica
Uniao S.A., owned by DOW;
(iii) Acquired from DOW, via its wholly-owned subsidiary Polietilenos Uniao
S.A.,
140,000 t p.a. LDPE plant located in Cubatao , in the state of
Sao Paulo.
(the production capacity of this subsidiary reached 270,000 t
p.a., as of 2007/8/1. As of the 3Q08, with the conclusion of
Capuava's ongoing expansion project, Polietilenos Uniao will have
a capacity of around 500,000 t p.a.)
The total value of said transactions amounts to R$ 210 million.