The Hindu Business Line : Merrill Lynch to play major role in Basell acquisition

GLOBAL investment powerhouseMerrill Lynch is emerging as the second largest investor in the acquisition of the Amsterdam-based Basell NV by the TCG (The Chatterjee Group) led consortium.

According to sources, Merrill Lynch is likely to play a major role in the acquisition exercise. The largest chunk of funds is likely to come from the Russia-born oil billionaire Mr Leonard Blavatnik's Access Industries Inc.

It was learnt that Haldia Petrochemicals, where TCG currently holds approximately 43 per cent as a primary promoter's stake, has more or less decided to participate in the deal.

The Empowered Group of Corporate Debt Restructuring has also cleared Haldia's proposal for participation in Basell's acquisition.

It has also been announced that Blackstone, a major private equity investor from the US, would be a significant member of the consortium. Sources, however, said that these were just initial commitments and that nothing had been firmed up.

"Till now, the funding equation among the consortium members had not crystallised. It would take some more time," sources said.

Mr Purnendu Chatterjee of TCG has been reported as saying that "members in this consortium might come in and leave too" but that this would not lead to any cancellation of the acquisition programme.

Meanwhile, sources in investment circles said that Blackstone was "probably" not too happy with the pricing of the deal, which was struck at 4.4 billion euro (around Rs 25,000 crore).

It includes the assets and the debt of the $8.4 billion of Basell.

"Blackstone is certainly a major investor in this deal but their share will be less than that of Access Industries and Merrill Lynch. So, even if they pull out, which we do not apprehend as of now, it will not jeopardise the deal," sources said.

Regarding Haldia Petrochemicals' participation, it was learnt that it could possibly be anywhere between Rs 1,100 crore and Rs 2,500 crore. The West Bengal Government, the principal promoter of Haldia Petrochemicals, is believed to have been convinced of the gains to be made by the company from the Basell acquisition.

When contacted by Business Line, a spokesperson of Haldia Petrochemicals said: "All issues relating to the Basell acquisition and Haldia Petrochemicals' participation will be decided by the promoters. So, the company in itself is not in a position to answer any of the queries."

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