Indorama Ventures (IVL) has entered into a deal to purchase US-based Ethylene Oxide (EO) and Ethylene Glycol (EG) producer Old World Industries and Old World Transportation for $795m.
Old World, which is involved in the production of EO and EG, has a crude EO capacity of 435,000tpa.
The acquisition is expected to be completed in Q1 2012 and is subject to customary approvals.
IVL Group CEO Aloke Lohia said they were able to acquire Old World in the US as it represents a rare opportunity to integrate into Mono Ethylene Glycol (MEG) in the most competitive zone for feedstock availability.
"By entering MEG now, IVL will be able to capture the premium margins that are expected to remain firm for the next four to five years when new capacities are likely to enter the market," Lohia added.
"The acquisition makes IVL the only global player in the polyester space with integration into both PTA and MEG."
Indorama is involved in the production of polyesters including MEG and purified terephthalic acid (PTA), used in the manufacture of polyethylene terephthalate (PET) and polyester fibers and yarns in Thailand.
IVL also has a strong global network and manufacturing presence for polyester value chain across Asia, Europe and North America.
The company said it is already integrated into PTA in Europe and Asia and virtually integrated in the US via co-location with a PTA supplier in Alabama.
Indorama products are used in diversified sectors including food, beverages, personal and home care, health care, automotives, textile, and industrial.
