European chemical companies Ineos and Solvay have agreed to merge their chlorvinyls activities into a EUR 4.3 billion ($5.6 billion) 50-50 joint venture. The combination would form a polyvinyl chloride (PVC) producer that will rank among the top three worldwide.
Craig Welsh, business communications for Ineos, told PlasticsToday a recent study carried out on behalf of Ineos ChlorVinyls and Solvay indicated that significant synergy benefits could be obtained through the combination of their respective chlorvinyls businesses.
"As is well known, the European PVC sector has for some time been and continues to be under significant pressure from reduced market demand and increasing raw materials costs," Welsh said.
The combined business would have around 5650 employees across nine countries and would pool each company's assets across the entire chlorvinyls chain. This includes PVC, which is the third most-used plastic in the world, caustic soda and chlorine derivatives.
Welsh anticipated there would be significant synergy benefits available in several key areas: the combination of two organizations into one, logistics cost savings, and the sharing of best practice between the two businesses in areas such as cost management, raw materials purchasing and technology.