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BP Agrees Sale of Petrochemicals Business Innovene to INEOS

BP LogoInnovene LogoBP today announced that it is to sell Innovene, its olefins, derivatives and refining group, to UK-based INEOS. The $9 billion cash sale, subject to regulatory approvals, includes all Innovene's manufacturing sites, markets and technologies. The sale is expected to be concluded early in 2006 at which time payment will be received by BP.

"Innovene has proved to be a very attractive business to its peers in the chemicals sector," said Lord Browne, BP Group Chief Executive. "This deal is the very best of a number of good offers. I'm delighted with the outcome which is excellent for BP's shareholders and for Innovene's future."

BP first announced the intention of separating its olefins and derivatives business from its petrochemicals portfolio in April 2004 with an initial public offering (IPO) as one, possible, disposal option. In the interim, it received a number of approaches from companies considering a trade sale leading to this decision instead of the IPO.

Browne said that the decision to sell Innovene in its entirety removed any uncertainty around market conditions at the time of an IPO, as well as would-be investors' concerns about BP's remaining stake and future intentions.

"Consistent with existing BP practice, we remain committed to returning excess free cash flow, including the net proceeds of this sale, to shareholders," he added.

"This is a transformational acquisition elevating INEOS to the world's fourth largest independent petrochemicals company," said Jim Ratcliffe, INEOS Chief Executive. "INEOS and Innovene share a BP heritage of high quality people, assets and technology and are highly complementary businesses."

Innovene's chief executive is Ralph Alexander and its chief financial officer is Mark Tomkins. Innovene manufactures olefins and related products which are the raw materials for plastics, packaging and textiles industries; and operates two refineries in Europe. BP was jointly advised by Goldman Sachs and Morgan Stanley on the IPO and sale.

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Posted 07/10/05

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