Specialty chemical company H&R Wasag AG will buy BPs European specialty products business, including its base oil refinery in Neuhof, Germany, the two companies announced Friday.
BP will keep its lubricant blending plant in Neuhof, a suburb of Hamburg, and the refinery acquired by H&R will supply it with 40,000 metric tons of base oil per year, the companies said. H&R added that future agreements could increase that volume somewhat, but stated that most of the yield from the 5,000-barrel-per-day plant will be white oils, paraffins, waxes and other non-lubricant products.
Lubricants currently make up approximately 10 percent of our overall business, said Franz Geerdes, managing director for H&Rs refinery at Salzenbergen, Germany. That proportion will not change with this acquisition.
London-based BP added that the sale will not affect its holding in the Spanish joint venture, Lubrisur, which – together with the Neuhof blending operations – serves as the core for its lubricant business in Europe.
In addition to the Neuhof refinery, H&R will acquire blending plants in Chorley and Tipton, U.K., and near Maastricht, Netherlands. The deal also includes marketing operations in Spain, Portugal, Benelux, Germany, the United Kingdom and parts of eastern and northern Europe. The companies agreed to not disclose the price of the sale, although they did peg the book value of assets involved at U.S. $30 million.
BP said the sale is another step in its effort to divest specialty products businesses worldwide. The company sold its wax business in North and Central America earlier this year and is still marketing its specialty operations in Asia and South Africa.
Its been a successful business but its not one of our core areas, a spokesman said. We decided to just exit the whole business globally.
The acquisition more than doubles the size of H&R, which is based in Salzenbergen, and immediately surpasses growth goals that it had aimed to meet by 2007. The acquired assets produce 500,000 tons of products per year, compared to the 300,000 tons that H&R produced through the first three quarters of 2003. Officials said the company can manage the acquisition because of its healthy equity position and low level of debt prior to the purchase. H&R will absorb 325 employees in the deal, which is expected to be completed Jan. 1.