Chevron Phillips Chemical said to acquire Nova Chemicals

Chevron Phillips Chemical Company, a joint venture between Chevron Corp and Phillips 66, has offered to acquire Nova Chemicals Corp for more than $15 billion including debt, according to Reuters.

Headquartered in Calgary, Nova Chemicals was founded in 1954. Over the years, it has diversified its business beyond foam packaging and insulation to foam beverage cups and containers.

Chevron Phillips Chemical, one of the world’s top petrochemical producers, would gain scale and expand its footprint through the acquisition of Nova Chemicals, whose expandable polystyrene and resins are used in a range of industries, from construction to packaging.

Abu Dhabi’s sovereign wealth fund Mubadala Investment Co, the owner of Nova Chemicals, has been exploring a sale of the Canadian plastics maker since the start of the year, and there is no certainty that it will accept the offer from ​Chevron Phillips Chemical, sources said.

According to the Financial Post, Chevron has offloaded some of its Canadian assets, including the 57,000-bpd Burnaby refinery in British Colombia, to Parkland Fuel Corp. in 2017. It maintains a 20 per cent interest in the Athabasca Oil Sands Project, operated by Canadian Natural Resources; a 60 per cent operating interest in its Ells River heavy oil leases; and is investing in its shale resources in the Duvernay in west-central Alberta, apart from other oil and gas interests.

If the deal proceeds, the Post reports, Chevron Phillips will become the third-largest producer of polyethylene in North America, behind ExxonMobil Corp. and Dow Chemical Co. It will also become the largest producer of high-density polyethylene (HDPE) on the continent, ahead of LyondellBasell Industries N.V.