British energy giant BP sold its global petrochemical business to INEOS for $5 billion in advance to achieve its $15 billion annual asset sales target, BP announced in a statement Monday.
INEOS will pay BP $400 million as a deposit and $3.6 billion on completion of the deal with an additional $1 billion to be paid in three separate installments of $100 million in March, April and May 2021 with the remaining $700 million payable by the end of June 2021.
Bernard Looney, the company’s chief executive officer said the decision would enable BP to compete and succeed through the energy transition. “This is another significant step as we steadily work to reinvent BP.”
BP said over 1,700 staff currently employed worldwide are expected to transfer to INEOS on completion of the sale.
BP’s petrochemicals business is focused on aromatics and acetyls and has 14 manufacturing plants in Asia, Europe and the US. It produced 9.7 million tonnes of petrochemicals in 2019, according to the statement.
Aromatics provide the building blocks that are fundamental to fibers, films and packaging for the global polyester industry. Acetyls support a wide variety of downstream food flavoring and preservation industries, including pharmaceuticals, paints, adhesives, and packaging.
“This acquisition is a logical development of our existing petrochemicals business extending our interest in acetyls and adding a world-leading aromatics business supporting the global polyester industry,” Jim Ratcliffe, founder and chairman of INEOS, was quoted in a statement issued by INEOS.
By Sibel Morrow