Basell will pay Huntsman shareholders $25.25 per share, a whopping 34 per cent more than the Monday, 25 June closing price of $18.90 on the New York Stock Exchange. The acquisition, which requires US and European Union regulators' approvals, is expected to be completed in the fourth quarter of 2007.

As a combined entity Basell and Huntsman would have 2006 revenues of over $26 billion and about 20,900 employees. Benefits to Basell: economies of scale in the supply chain and synergies in marketing across a larger geography.

Basell is owned by Russian-born billionaire Leonard Blavatnik's Access Industries, which is based in New York. Blavatnik bought Basell for $5.2 billion from BASF and Royal Dutch Shell in 2005.

Basell is the world's leader in polypropylene and advanced polyolefin products, a leading supplier of polyethylene and catalysts, and a global leader in the development and licensing of polypropylene and polyethylene processes. Together with its joint ventures, Basell has manufacturing plants across the world and sells products in more than 120 countries. It has research and development activities in Europe, North America and the Asia-Pacific region.

Troubled times
The Huntsman-Basell agreement will end a five-year investment by New York-based MatlinPatterson, which bought debt in Huntsman for about $500 million when Huntsman was close to bankruptcy in 2002 and then converted the holding into a controlling stake. In 2003, MatlinPatterson paid around $200 million for a bolt-on acquisition of Belgian polymers maker Vantico Group SA. Huntsman made a $1.6 billion IPO in February 2005.

The Hoofddorp, Netherlands-based Basell, has been on the prowl for acquisitions for some time. It recently missed the chance to acquire General Electric Co.'s plastics business, which was grabbed by Riyadh-based Saudi Basic Industries Corp for an all-cash $11.6-billion deal in end-May 2007.

Huntsman has been on the lookout for a buyer for some time, and has sought to overcome its problems through asset sales. For example, in February 2007 it sold a chemicals and polymers unit to Koch Industries Inc. of Wichita, Kansas, for $742 million. Earlier, in September 2006, it had sold its European petrochemical business to Saudi Arabian Basic Industries Inc. for $826 million, soon after which it had sold its methyl tertiary butyl ether assets to Houston-based Texas Petrochemicals LP for $275 million.

According to company founder and chairman Jon Huntsman, his family would use the proceeds from the sale to pursue their charitable work, which focuses on cancer research. Forbes magazine estimated the Huntsman family's net worth at $1.6 billion last year.