Sir Jim Ratcliffe flexes muscle with £4bn BP takeover

● Industrialist’s Ineos group to acquire petrochemicals business from oil major

Sir Jim Ratcliffe has added to his Ineos industrial empire after sealing a $5 billion (£4bn) deal to buy a slice of slimmingdown oil major BP.

Grangemouth refinery operator Ineos will pay BP in instalments until June next year for its petrochemicals business which makes a key component in polyester.

The business employs some 1,700 staff, spread mainly across Asia, the US, Belgium and a plant in Hull.

The deal means that a transforming BP has met its promise to sell off $15bn of assets a year earlier than initially promised. It also announced plans recently to cut 10,000 jobs globally amid a slump in demand for oil.

The planned sale is another step in a revamp led by the FTSE 100 listed oil giant’s new chief executive Bernard Looney.

He said: “This is another significant step as we steadican ly work to reinvent BP. These businesses are leaders in their sectors, with worldclass 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 compete and succeed through the energy transition.”

Ineos said the acquisition would extend its portfolio as well as the geographic reach of the business.

Ratcliffe, founder and chairman of Ineos, said: “We are delighted to acquire these top-class businesses from BP, extending the Ineos position in global petrochemicals and providing great scope for expansion and integration with our existing business.

“This acquisition is a logical development of our existing petrochemicals business extending our interest in acetyls and adding a world leading aromatics business supporting the global polyester industry.”

Aromatics provide the building blocks for the global polyester industry – key to fibres, films and packaging. Acetyls support a wide range of industries in food flavouring and preservation, pharmaceuticals, paints, adhesives and packaging.

BP expects to report its second-quarter 2020 results on 4 August and hold a capital markets day in mid-september.