Korea’s SKC sells 49% stake in chemical business to Kuwait’s PIC

Korea’s SKC sells 49% stake in chemical business to Kuwait’s PIC
Published: 14 August 2019 - 6 a.m.
By: Martin Menachery
SKC and Petrochemical Industries Company (PIC) have signed agreements for the sale of 49% stake in SKC’s chemical business to PIC, including propylene oxide (PO) and propylene glycol (PG).

SKC’s board of directors have approved to vertically spin-off its chemical business and sell 49% interest in the new entity to form a joint venture with PIC.

The joint venture includes a 45% stake in SKC Evonik Peroxide Korea. SKC and PIC have agreed the enterprise value for the joint venture company of $1,195mn.

SKC has a strategy to achieve an annual production target of one million tonnes of PO. SKC believes this joint venture will facilitate the exploration of future opportunities and is an important step towards its strategy.

This transaction will enhance PIC’s capacity in downstream derivatives and is an important step towards achieving Kuwait Petroleum Corporation’s (KPC) 2040 petrochemical strategy.

This joint venture is based on the long-term trust developed through multiple strategic cooperatives between KPC, PIC’s parent company, and SK Group. SKC and PIC aim to explore opportunities to further develop their PO business globally through this joint venture.

Wanjae Lee, SKC CEO, said, “SKC has consistently worked towards transforming its business model towards high value-added materials, and will continue to focus on high value-added specialty products to become the global top-tier PO player through this global joint venture.

Mutlaq Rashed Alazemi, PIC CEO, said: “We are extremely pleased to have this strategic partnership with SKC, who is one of the leading producers and marketers of specialty chemicals. We have a shared vision to explore opportunities to expand this partnership globally. This partnership is aligned with PIC’s global expansion strategy into downstream derivatives.

The transaction is expected to close in Q1-2020, subject to customary closing conditions and regulatory approvals.

Credit Suisse and Shin&Kim are acting as financial and legal advisors to SKC, and HSBC and Ashurst are acting as financial and legal advisors to PIC.

For the latest refining and petrochemical industry related videos, subscribe to our YouTube page.

Click here to add your comment

Please add your comment below
Your email address will not be published