Slaughter and May is advising INEOS on three landmark joint ventures with SINOPEC for an aggregate value of US$7 billion, which comprise:
- INEOS acquiring 50% equity interests in Shanghai SECCO Petrochemical Co., Ltd., a subsidiary of SINOPEC with an annual petrochemicals production capacity of 4.2 million tonnes, following its successful tender bid on the Shanghai United Asset and Equity Exchange;
- SINOPEC acquiring 50% stake in INEOS Styrolution Advanced Materials (Ningbo) Pte Ltd, which is currently constructing a 600,000 tonnes per year ABS plant. INEOS and SINOPEC also plan to work together on two additional 300,000 tonnes per year ABS plants which will also be built based on INEOS’ world-leading Terluran® ABS technology; and
- A 50:50 greenfield joint venture between INEOS and SINOPEC to build a new 500,000 tonnes per year high-density polyethylene (HDPE) plant in Tianjin, with the plan to build at least two additional HDPE plants with similar capacity in the future to produce INEOS pipe grade under license.
Once completed, these joint ventures are expected to generate combined annual turnover of approximately US$10 billion from nearly 7 million tonnes of petrochemicals production capacity, which will significantly reshape INEOS’ petrochemicals production and technology in China.
Justin Chan, lead partner on the transactions, said “we are pleased to have advised our long-standing client, INEOS, on its landmark joint-venture agreements with SINOPEC which will significantly expand INEOS’ footprint in China. The latest round of transactions, not only showcases the Firm’s leading capabilities and track record in the petrochemical industry, but also underlines the Firm’s long standing relationship with INEOS as trusted counsel on their most strategically important transactions.”
Slaughter and May advised INEOS on its US$5 billion acquisition of BP’s global petrochemicals business in 2021, pursuant to which INEOS has been in joint venture with SINOPEC in the Acetyls and Aromatics business in China.
The transactions are subject to customary completion conditions, including regulatory and anti-trust approvals.
Slaughter and May worked closely with Jonny Ginns, Robert Mace and Michel De Puydt from the in-house legal team at INEOS.
INEOS is a global chemical company, and a global manufacturer of petrochemicals, speciality chemicals and oil products. Comprising 36 businesses, INEOS operates 194 sites in 29 countries throughout the world.
SINOPEC is one of the largest integrated energy and chemical companies in China.