UK markets close in 3 hours 57 minutes

U.K.’s Richest Man Jim Ratcliffe Revisits Roots of Fortune With BP Deal

Andrew Noël

(Bloomberg) -- More than 15 years after Jim Ratcliffe bought part of BP Plc’s petrochemical business to help establish Ineos Group Holdings SA, the now billionaire is buying the rest.

Ineos agreed to pay $5 billion for about 15 plants on Monday, reuniting them with ex-BP assets Ratcliffe acquired for about $9 billion in 2005. The U.K. chemicals giant will now look to improve and expand the sites, according to Ineos executive Tom Crotty, having long considered them a natural fit for the company.

“The question back then was why we weren’t buying these bits, but they weren’t for sale,” Crotty said. “It’s always been a piece of the chemistry set that was missing for us.”

Ineos and BP chemical plants operate side by side in some locations, including Hull in England and the Belgian city of Geel. The acquisition, which includes aromatic petrochemicals and acetyls, will expand Ineos into polyester and increase exposure to Asian markets including China, South Korea and Indonesia.

For BP, the deal marks a significant step toward strengthening its balance sheet and accelerating a move away from oil and gas, which have been hammered by the coronavirus pandemic. Chief Executive Officer Bernard Looney has also pledged to eliminate carbon emissions by 2050.

Richest Person

Ratcliffe made his $19.4 billion fortune piecing together unloved assets from oil majors into a more cohesive group that now ranks among the world’s top chemical makers. The 67-year-old still owns a majority stake and remains the driving force behind Ineos. He is ranked as the U.K.’s richest person, according to the Bloomberg Billionaires Index.

A chemical engineer turned financier, Ratcliffe started out in 1998 by leasing a former BP chemicals site in Antwerp, Belgium. Over the course of the next two decades, he used it as a base to make multiple acquisitions from rivals --- including that landmark 2005 deal with BP -- earning a reputation for being a tough negotiator along the way.

Alongside chemicals, Ratcliffe has turned his mind toward other areas, including buying a Swiss football team and a motorcycle jacket company, while sponsoring cycling and sailing teams. A driving enthusiast, he’s also bankrolling the development of an off-road vehicle.

Ratcliffe orchestrated the deal with BP without financial advisers and negotiations were largely conducted remotely given Covid-19 restrictions. The deal will be financed using debt linked to Ineos’ Styrolution and Innovene arms, Crotty said, and should be completed by the end of the year. Slaughter and May provided legal advice.

For more articles like this, please visit us at bloomberg.com

Subscribe now to stay ahead with the most trusted business news source.

©2020 Bloomberg L.P.