Indorama Ventures’ $1.3 Billion Acquisition of Oxiteno

Skadden, Arps, Slate, Meagher & Flom represented Ultrapar Participações in the transaction.

Indorama Ventures Public Company Limited (IVL), a global chemicals producer, agreed to acquire Brazil-based Oxiteno S.A. Indústria e Comércio, a subsidiary of Ultrapar Participações S.A. The acquisition gives IVL a unique portfolio in high-value surfactants and significantly extends its existing Integrated Oxides and Derivatives (IOD) business.

Oxiteno is a leading integrated surfactants producer, catering to highly attractive end-use markets in LATAM. The acquisition brings an excellent management team, world-class expertise in green chemistry innovation, strong customer relationships in Brazil, Uruguay and Mexico, and substantial growth potential in attractive end markets, including the U.S. through a new facility in Pasadena, Texas. Oxiteno has a strong commitment to environmental governance, and its focus on lowering greenhouse gas emissions will also enhance IVL’s ESG credentials.

Through the acquisition, IVL will assume a unique market position in technologies catering to niche, IP-rich and value-added applications in home & personal care, agrochemicals, coatings and oil & gas markets. The surfactants market has seen consistent growth over the last decade, driven by trends in population growth, urbanization and increasing hygiene awareness amid the Covid-19 pandemic.

IVL will purchase Oxiteno for US$1.3 billion (subject to adjustments at closing), with a deferred payment of $150 million in 2024. The transaction is subject to customary conditions to closing, including approval of relevant regulatory authorities. The transaction is expected to close in Q1 2022 and will be earnings accretive immediately. Financing is secured through deferred payment, using existing extra cash on our balance sheet, free cash flow generated from existing businesses, short term loans against working capital and the balance as long-term debt.

The Skadden team advising Ultrapar Participacoes on U.S. securities law aspects included capital markets partner Filipe Areno (Picture; São Paulo) and M&A partner Paul Schnell (New York).

Involved fees earner: Filipe Areno – Skadden Arps Slate Meager & Flom; Paul Schnell – Skadden Arps Slate Meager & Flom;

Law Firms: Skadden Arps Slate Meager & Flom;

Clients: Ultrapar Participações S.A.;