Mexican petrochemical company Alpek announced 1 February that it has signed an agreement to acquire international PET laminate producer Octal Holding for $620 million
The transaction is structured on a debt-free basis, with financing for the acquisition secured through cash available on Alpek’s balance sheet, funds from its existing businesses and bank loans. No further details were provided.
The acquisition was made possible in part by the strength of Alpek's 2021 results. Those results will allow the company to ‘complete this attractive acquisition without sacrificing the financial stability that has characterised Alpek’, said José de Jesús Valdez, Alpek CEO in a statement.
Alpek already produces some PET products in addition to polyester and industrial and specialty chemicals. Currently, global demand for PET resin is strong, and this acquisition will expand Alpek’s presence into the PET sheet and thermoforming industries, adding more than 1 million tonnes to its capacity.
“This transaction is ideal for Alpek. Through a single acquisition we get access to the growing and profitable segment of the PET sheet segment and serve our customers’ increased PET resin demand,” said de Jesus Valdez.
And next to boosting capacity and forward-integrating Alpek into the PET sheet business segment, it ticks other boxes as well. Oman-based Octal is a major global producer of PET sheet, with operations that span four plants in Saudi Arabia, USA, and Oman. Octal boasts the largest integrated PET producing site in the world at any single location in Salalah, Oman. Alpek expects to capture global administrative and operational synergies through the integration of these sites into the existing asset base.
This acquisition will also help Alpek close the gap towards achieving its ESG goals. Octal owns a patented technology known as direct-to-sheet (DPET), which eliminates 5 energy-intensive stages that are part of the conventional sheet production process, decreasing energy consumption while increasing efficiency. The result is a 25% lower carbon footprint and lower production costs - a sustainable cost advantage that Alpek can leverage across its current plants.
The transaction is subject to customary conditions to closing, including the approval of relevant regulatory authorities, and is expected to close in the first half of the year.