The Telegraph
Since 1st March, 1999
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Plastic power for Purnendu

Calcutta, May 5: If it's a plastic world, then you can probably blame Basell for it ' says the company website. Tomorrow, it may make an addition ' blame Purnendu Chatterjee also.

At 5.30 in the morning (Indian time), a group of investors led by Chatterjee and Russian-born billionaire Leonard Blavatnik sealed the deal to buy Basell, the Netherlands-based company owned jointly by Royal Dutch/Shell and BASF.

Valued at an estimated 4.4 billion euros ($5.7 billion), Basell's takeover is the largest acquisition abroad involving an Indian.

Laxmi Mittal's $4.5 billion acquisition of the International Steel Group of Ohio has been the biggest so far.

An ecstatic Chatterjee told The Telegraph a few hours after the deal was clinched in London: "The agreement has been entered into for taking over Basell. We look forward to help Basell improve its global dominance. We want to work on it. Right now I cannot comment how the financing will be done. It will take some time."

Closure of the sale, including European Union clearances, to the consortium led by The Chatterjee Group and Blavatnik's private equity investment firm Access, which has large interests in the Russian oil industry, is expected in the second half of 2005.

Blavatnik, incidentally, is the rich Russian based in the US who outbid Mittal by offering to pay '41 million for a London house. It's another matter that Mittal later bought an even pricier home.

The acquisition entails a huge financial commitment for the 51-year-old Chatterjee, who also has to raise some Rs 1,560 crore to buy the Bengal government out of Haldia Petrochemicals, the company he said had given him and his associates the confidence to go for Basell.

"We will let you know as and when we come up with funds. I cannot talk beyond this right now," Chatterjee said.

The source of his strength to strike a deal of such magnitude lies in the upswing in the petrochemicals industry that has turned around the fortunes of trouble-ridden Haldia Petrochem, too.

"The experience of Haldia has given us the confidence to go ahead with Basell," Chatterjee said.

Chatterjee's Haldia venture may be brought in later to play a role in Basell.

Haldia Petrochem has already made a presentation to the Bengal government on the benefits it hopes to reap if it joins Basell as a minority shareholder.

The Chatterjee-led consortium emerged as the winner after Iran's National Petrochemical Company got elbowed out of the race by US pressure. The Bush administration had openly expressed its disapproval of the Iranian suitor.

Basell's acquisition elevates Chatterjee to a position in the hall of Indian corporate fame, though he is only one of the cogs in the wheel that will churn out the cash for Basell.

Neither the Ambanis, nor the Tatas ' India's largest corporate houses ' has either jointly or singly made an acquisition that comes anywhere close to the Basell deal.

Basell is the world's largest producer of polypropylene and Europe's biggest maker of polyethylene, the key ingredients that go into plastics of all kinds. It is a global leader in the development and licensing of polypropylene and polyethylene processes.

Haldia Petrochem will be able to access these technologies ' Basell holds some 150 product patents ' and tap the Dutch company's marketing network spread over 120 countries if it does enter the picture at a later stage.

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