Petrobras Brasileiro purchases Suzano Petroquimica

Petroleo Brasileiro SA, Brazil’s state-controlled oil company, is to purchase Suzano Petroquimica SA for US$1.4 billion and will become the country’s second-biggest petrochemical company.

Petrobras, based in Rio de Janeiro, said it will purchase shares held by Suzano Holding SA, which owns more than 99.9% of Suzano Petroquimica’s voting stock, for US$1.4 billion.

Petrobras is looking to increase its petrochemical business to improve profit and will become the largest producer of polypropylene, a resin used in the making of plastics.

A spokesperson for Sao-Paulo based Espirito Santo Securities said that Petrobras plans to add more value to its product chain by buying Suzano. Petrobras will pay up to $7.06 for each ordinary, voting share and as much as $5.65 for each preferred share. The company will make a public offering to minority shareholders and plans to delist Suzano Petroquimica stock in 30 days.

Petrobras plans to look for joint ventures with other petrochemical companies, such as Uniao de Industrias Petroquimicas SA, in order to enhance its presence in the industry.