BP has signed a multi-billion-pound deal to sell its global petrochemicals business to one of the world richest financiers.
The company said the $5billion sale to INEOS will be "the next strategic step in reinventing BP", just weeks after it announced up to 10,000 job cuts.
Bernard Looney, BP's chief executive officer said: “This is another significant step as we steadily work to reinvent BP. These businesses are leaders in their sectors, with world-class technologies, plants and people. In recent years they have improved performance to produce highly competitive returns and now have the potential for growth and expansion into the circular economy.
“I am very grateful to our petrochemicals team for what they have achieved over the years and their commitment to BP. I recognise this decision will come as a surprise and we will do our best to minimise uncertainty. I am confident however that the businesses will thrive as part of INEOS, a global leader in petrochemicals.
“Strategically, the overlap with the rest of BP is limited and it would take considerable capital for us to grow these businesses. As we work to build a more focused, more integrated BP, we have other opportunities that are more aligned with our future direction. Today’s agreement is another deliberate step in building a BP that can compete and succeed through the energy transition."
Privately--owned chemicals giant INEOS operates across 180 sites in 26 countries, employing some 22,000 staff worldwide.
It is understood that around 1,700 BP employees will transfer to INEOS on completion of the sale.
Over the past two decades, the firm has acquired a number of businesses from BP, most notably the 2005 $9billion purchase of Innovene, the BP subsidiary that comprised the majority of BP’s then chemicals assets and two refineries.
INEOS was founded by British billionaire chemical engineer Sir James Arthur Ratcliffe in 1998.
He owns 60% of the business and it believed to have a net worth of more than £20billion.
Brian Gilvary, BP’s chief financial officer, said: "With today’s announcement we have met our $15billion target for agreed divestments a full year ahead of schedule, demonstrating the range and quality of options available to us."
Gilvary, who led the negotiation with the owners of INEOS, added: "BP has had a long relationship with INEOS and this agreement reflects the mutual respect and trust that exists between us. It is a strategic deal for both parties that recognises both the high quality of the businesses and that INEOS is in many ways a natural owner for them."
