The Independent: BP’s Russian oligarch buys Shell plastics joint venture for £3bn
By Michael Harrison Business Editor
06 May 2005
A consortium led by one of the Russian oligarchs with whom BP has teamed up paid £3bn yesterday for a plastics joint-venture owned by Shell and BASF after the sale of the business to an Iranian company fell foul of US political pressure.
Basell, the world’s top polypropylene producer, is being bought by Access Industries, a New York-based business run by Len Blavatnik, and the Chatterjee Group, a private US investment company with extensive interests in India.
Mr Blavatnik is one of the three oligarchs who own a stake in BP’s Russian oil joint-venture, TNK-BP. In addition to his oil interests, Mr Blavatnik also co-owns Russia’s second-biggest aluminium firm SUAL and has a fortune estimated at $2.4bn (£1.3bn). He spends his time between New York and London, where he owns a house near the mansion of the Indian steel magnate Lakshmi Mittal in Kensington Palace Gardens, for which he reputedly paid more than £50m.
Shell and BASF had looked set to sell the business to Iran’s state-owned National Petroleum Company, which offered the highest price in the auction. However, they were prevented from completing the deal after the US State Department warned that American companies would be barred from doing business with Basell if it fell under Iranian ownership. The US also voiced concerns about the potential misuse of Basell technology. Basell operates plants in 21 countries, including the US, where it has 1,000 employees.
The £3bn sale proceeds includes debt in the business and will be shared evenly by Shell and BASF. The sale forms part of a divestment programme at Shell, aimed at raising $15bn over the next three years.