Reliance Industries Limited (RIL), founded in 1966, is eyeing a takeover of the bankrupt LyondellBasell, the third-largest chemical maker with $27 billion in assets and $19 billion in liabilities. RIL aims to leverage its cash reserves in a bid and potentially become the world's largest producer of polypropylene, enhancing its global presence. The acquisition, if successful, would mark one of the largest chemical industry deals to date.

1. Submitted by :
Sujith Bhaskar R
Lyondell Reliance
1

2. Lyondell basell
2
 Founded in year 2007 by Jim gallogly.
 It is an MNC in Netherlands.
 It grew through acquisition and operated in five
different continent.
 Total human resource employed is around
15000.
 The third largest chemical maker.
 Its an indirect subsidiary of Lyondell basell
industries AF.

3. Contd……….
3
 The total assets of the company was $27 billion and
liabilities around $19 billion in bankruptcy petition.
 $ 8 billion was received from the community debtor in
possession.

4. POSITION OF RELIANCE AND
LYONDELLBASELL
4
 Lyondellbasell were technology partner with
Reliance for Polypropylene and HDPE .
 Enjoys monopoly in the sector.
 Lyondell also the largest producer of polyolefin's.
 LB is the 2nd largest producer of oxy fuels.
 LB is the 3rd largest producer of polyethylene
 RIL worlds 7th largest polypropylene maker
 RIL is the 4th largest paraxylene and PTA maker.

5. CONTD……..
5
 RIL is the 4th largest paraxylene and PTA
maker.
 RIL is the 6th largest producer of MEG.
 Other Asian players use much costlier naphtha
 RIL has limited global presence,(marketing and
distribution )
 RIL has 14 major Manu. Facilities mainly in
Maharashtra and Gujarat.
 LB has 50 Manu, Facilities in 19 countries.

6. CONTD…………
6
 RIL offered cash offer to LB.
 Apollo kkr has made an offer to buy the stake o
 Financing in 60-40% ratio i.e.. 60% debt and
40%cash.
 Ril is planning to $5.5 billion cash reserves to help
fund what would be its largest offshore purchase.
 Apollo Management, Ares Management and Kohlberg
Kravis Roberts & Co. are also in cue for hope get their
hand on lyondellbasell.

7. 7
VALUE OF ASSETS AND LIABILITIES (DECEMBER 20
,2007)

8. Reliance industries
8
 Established in 1966 by Dhirubhai Ambani.
 It has more than 3 million shareholders, in the market.
 "1 out of every 4 investors in India is a Reliance
shareholder.”
 only Indian firm featured in the Forbes's list of "world's
100 most respected companies.”
 Human resource employed are 48000.

9. Contd……….
9
 RIL has a wide range of products from petroleum
products, petrochemicals to garments(under the brand
name of Vimal).
 Reliance Retail has entered into the fresh foods market
as Reliance Fresh and launched a new chain called
“Delight Reliance Retail .”
 NOVA Chemicals have signed a letter of intent to make
energy-efficient structures.

10. Subsidiary companies (RIL):
10
Reliance industries have many subsidiary companies;
a) Reliance petroleum
b) Reliance life sciences
c) Reliance industrial infrastructure limited
d) Reliance institute of life sciences
e) Reliance solar limited

11. Reliance oil and gas
11
 In 2002 reliance found natural gas in the Krishna
Godavari basin off the coast of A.P and
Vishakhapatnam.
 It started production on 1st April 2009.
 The gas reserve is 7 trillion cubic feet in size.
 Equivalent to 1.2 billion barrels (165 million tonnes)
of crude oil, but only 5 trillion cubic feet are extractable.

12. Current status of reliance
12
 Reliance shares went up by 75%.
 Gain of 3.4 % in Mumbai trading .
 Declining trend in the bonds of reliance on other hand.
 Ambani is ready to pay-off Lyondell's shareholders $10.3 in
less than 2 years.

13. Contd…………
13
 Reliance seeking for asset abroad , to reduce the risk of
investing , mostly in India.
 Currently a law suit is filed over natural gas supplies for
which rel.ind is ready to pay $6 to $12 billion for the
stake.

14. Achievements of RIL
14
 Tata steel Ltd. is the 1st biggest company which bought
Corus group plc for $12 billion.
 Reliance is expected to be the biggest acquisition after
Tata
 Reliance’s takeover of LyondellBasell would be the
second-largest chemical acquisition

15. Contd…………
15
 The $18.8 billion purchase of Rohm & Hass Co. by Dow
Chemical.
 Reliance is the worlds largest oil processing complex.
 Two adjacent refineries with capacity to produce 1.24
million barrels of oil a day.

16. Facts and figures on the issue
16
 Lyondell chemicals and fuel makers have gone
bankrupt.
 Reliance oil refiner and explorer ready to buy the
controlling stake of the company.
 Mukesh ambani the controller of the reliance industries
has offered undisclosed amount.
 Lyondell asked its creditors to forego $18 billion out of
$27 billion of its debt.

17. Contd……..
17
 “Compelling one off opportunity” is the deal type.
 Expected revenue to be earned by the these two companies is
estimated to be around $80billion .
 It will outsize the existing Dow chemical company ,the largest
chemical co. in U.S.

18. Contd …..
18
 Access to U.S fuel market.
 Reliance would become the largest producer of
polypropylene, used in refrigerator casing.
 Reliance will receive $12 billion “free cash flow” as its
biggest gas field will reach its total output next year.

19. Lyondell’s bankruptcy
19
 Filed for bankruptcy on Jan 06
 Has the following debts to pay :
Bonds - $7.06 billion
Loans to mature next year and $20 billion due in
2027
 Lyondell asked its creditors to forego $18
billion .
 Temporary restrain order to prevent creditors
from taking action against the company.

20. Contd……………
20
 The action by the creditors can lead European units
into bankruptcy.
 Lyondell creditors include :
 Deutsche Bank, which holds about 25 percent of
outstanding notes due to mature in 2015, and
 Money manager Columbus Hill Partners and affiliates,
which owns about 17 percent of the notes.

21. Current sell and
purchase
21
 Reliance and India's Essar group are currently going
into
bidding process on overseas plant.
 Royal Dutch shell plc and Exxon Mobil corp.
are selling refining assets , as there is declining
fuel demand and processing margin.

22. Revenue earned
22
FIRMS REVE
NUE
(08)
(BILLI
ON)
%PLAS
TICS
%
REFININ
G
%PETR
OCHEMI
CALS
PRODU
CTS
RELIANCE $32.4 -- 59 36 Gasoline
, diesel,
jet fuel,
additives
,
ethylene,
propylen
e,
plastics
LYONDEL
L
$50.7 35 34 30

23. Reliance fastnacht on Lyondell's
23
 Bid proclamation:
 Reliance industries announces cash bid for bankrupt
Lyondell.
 The amount offered is equal to the difference between
asset and liabilities

24. Conclusion
24
Reliance if able to acquire his company will become
the world largest and most powerful company in the
world. It will not just give an edge over other firms but
also boost the country economic condition . It will lead
to a mass global transformation of the industry facets
to come in open and take the risk.

25. 25

26. Bibliography
26
 http://www.bloomberg.com/apps/news?pid=20601080
&sid=axGIUkK8RfZE
 http://en.wikipedia.org/wiki/LyondellBasell
 http://www.reuters.com/article/idUSN1354539020090
214
 http://online.wsj.com/article/SB100014240527487048
88404574549960291606506.html
 http://www.lyondellbasell.com/NR/rdonlyres/654A662
D-1870-40AC-831E-
08F5ADFB73C2/0/ProFormaIncomeStatementandEB
ITDApdf5508.pdf

27. Contd………
27
 http://www.arabianoilandgas.com/pictures/gallery/Indu
stry%20Trends/olefins_unit_web.jpg
 http://www.icis.com/assets/getAsset.aspx?ItemID=226
13
 http://www.lyondellbasell.com/NR/rdonlyres/B9FF8C0
0-E583-45BB-9BB5-
F00948221B50/0/middle_east.jpg
 http://news.google.co.in/news?hl=en&q=reliance+indu
stries&revid=1861666253&resnum=0&um=1&ie=UTF
-
8&ei=pjglS7XzKYqgkQW73PmnAw&sa=X&oi=news_
group&ct=tit
 http://api.ning.com/files/pli0Q8*EdCbpvVAAX4zzfzyn-
TT8Pll75Nc0QVIe1kaoSAz2KAiVxVWK2kHeOdROtP
r6q7yGqdOZjgq*39Qz7b3N7eBM*HKT/ThankyouButt

28. Contd……..
28
 http://filecache.drivetheweb.com/mr4enh_lyondell/196
/XK5R4309.jpg
 http://www.google.co.in/search?hl=en&source=hp&q=
lyondellbasell+reliance&meta=&aq=1s&oq=lyondell+b
asell
 http://chemicals.einnews.com/news/lyondellbasell
 http://www.chemicals-
technology.com/features/feature_images/feature5750
1/1-petrochemical-complex.jpg
 http://www.topnews.in/files/RIL-logo.jpg

29. 29