Key Moments
- Exxon Mobil (NYSE:XOM) and LyondellBasell NV (F:LYB) are among potential bidders for Shell’s (AS:SHEL) U.S. chemicals portfolio, which may be valued at up to $8 billion.
- The portfolio comprises four plants in Louisiana, Texas, and Pennsylvania, including the Monaca complex, which began operations in 2022 after about $14 billion of investment.
- Shell is also working with advisers to market its European chemicals assets, which are expected to achieve a substantially lower valuation than the U.S. portfolio.
Strategic Review of U.S. Chemicals Business
Exxon Mobil (NYSE:XOM) and LyondellBasell NV (F:LYB) have emerged as prospective buyers for Shell’s (AS:SHEL) U.S. chemicals operations, according to a report by the Financial Times. The assets are estimated to attract offers of as much as $8 billion as Shell moves to divest businesses it views as underperforming.
The Financial Times, citing people familiar with the process, reported that the U.S. assets have drawn interest from several parties as Shell evaluates options to streamline its portfolio.
Range of Interested Buyers
In addition to Exxon Mobil and LyondellBasell, the Financial Times report said that private equity firm Apollo and the chemicals division of Kuwait Petroleum Corporation have also signaled interest in the U.S. chemicals assets.
Non-binding bids for the portfolio were submitted last month, according to the report, which cited people familiar with the matter. These initial offers mark an early stage in the sale process, with prospective buyers assessing the scale and performance of the assets.
Overview of the U.S. Asset Portfolio
The U.S. package under consideration consists of four chemical plants located across Louisiana, Texas, and Pennsylvania. Among these is Shell’s Monaca facility in Pennsylvania, a major complex that started operations in 2022.
Shell invested about $14 billion in the Monaca site, which is capable of producing up to 1.6 million tonnes of polymers per year. This facility forms a significant part of the U.S. chemicals portfolio now attracting potential buyers.
| Asset Component | Location | Key Details |
|---|---|---|
| Monaca complex | Pennsylvania | Started operations in 2022; about $14 billion investment; capacity up to 1.6 million tonnes of polymers annually |
| Other U.S. plants (3 facilities) | Louisiana and Texas | Part of Shell’s U.S. chemicals portfolio marketed for sale |
Valuation Versus Historical Investment
According to the Financial Times, the potential valuation of up to $8 billion for the U.S. chemicals portfolio would be well below Shell’s aggregate investment in these facilities. The report highlighted that this prospective price tag would represent a meaningful discount relative to the capital Shell has deployed in its U.S. chemicals footprint.
European Chemicals Assets Also in Play
The Financial Times further reported that Shell has initiated work with advisers to explore a sale of its European chemicals assets. While these assets are also being marketed, the report indicated that they are expected to attract a significantly lower valuation than the U.S. portfolio.
This move to consider disposals in both the U.S. and Europe underscores Shell’s broader effort to refocus its chemicals operations and shed assets that are not meeting performance expectations, according to the report.
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