Mexichem Buying INEOS Fluor Unit

Mexican chemical producer Mexichem has agreed to acquire the fluor unit of INEOS Group, a UK-based manufacturer of petrochemicals. The transaction is estimated to be valued at around $300m-$350m, or 5x Ebitda, according to a Mexico-based equity analyst who covers Mexichem. The analyst also estimates that this acquisition will contribute to a sales increase of 7%-14% to Mexichem. The buyer is paying cash for the asset. “Mexichem has the resources to pay without increasing its debt levels because in late 2009 it issued $350m in bonds,” the analyst says. Moody’s says that the acquisition will not affect Mexichem’s Ba1 rating or its stable outlook. Meanwhile, an INEOS spokesman in London says that the divestiture of the fluor unit is part of the company’s efforts to strengthen the balance sheet. He adds that Barclays advised the seller.