RIL set to acquire BP Plc's facilities

By agencies   |   Monday, 29 August 2005, 07:00 Hrs
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MUMBAI: Reliance Industries Ltd is zeroing in on acquiring the refinery and petrochemicals facilities of BP Plc in France and Belgium.

Sources familiar with the development said that the due diligence exercise of BP, which had been on in Mumbai for the past few weeks, was now over.

"The BP refinery and petrochemicals facilities in France and Belgium have been evaluated. The deal could close any time," he said.

However, there is no official word as yet from the company on the development. Reliance officials had no comments to offer as the matter, they said, was speculative and even otherwise confidentiality clauses would not allow them to say anything till the deal was over.

The market talk is that the deal size could be in the region of Rs 300 billion

Mukesh Ambani, Chairman and Managing Director, RIL, had said at the August 3 AGM that the company has enough surpluses for new acquisitions and initiatives. RIL generates surplus cash to the tune of Rs 130 billion annually. With existing avenues for deploying cash drying up with the demerger of its energy and infocomm businesses, RIL has been trying to identify fresh avenues of growth for a while now.

The market has been rife with rumors for some time now that a mega deal involving RIL is in the making.

It was widely expected that RIL would make some announcement to this effect during its AGM earlier this month.

In March this year BP hived off its olefins and derivatives plastics business as a subsidiary under the label Innovene, a move widely believed to have been a precursor to a sell-off. Innovene, with a turnover in excess of $15 billion last year, is ranked the fourth largest petrochemicals firm in the world and is headquartered in Chicago.

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