NOVA Chemicals signs agreement to grow its U.S. Gulf Coast presence

Tuesday, Apr 18, 2017

NOVA Chemicals Corporation (“NOVA Chemicals”) and Williams Partners L.P. (“Williams”) today announced that NOVA Chemicals has agreed to acquire Williams’ 88.46% ownership interest in the Geismar, Louisiana olefins plant, approximately 525 acres of undeveloped land adjacent to the plant, and Williams’ interest in the Ethylene Trading Hub in Mt. Belvieu, Texas (collectively, the “Business”). Under the terms of the membership interest purchase agreement, NOVA Chemicals will pay $2.1 billion for the Business, subject to working capital adjustments. Upon closing, NOVA Chemicals and Williams will enter into a long-term arrangement for Williams to transport and supply ethane feedstock to support the plant.

The plant produces approximately 1.95 billion pounds of ethylene annually and is located in the U.S. Gulf Coast region, the largest refining and petrochemical production hub in North America. With riverfront access, the adjacent land represents a significant opportunity for future growth.

“This transaction provides us with the opportunity to acquire an operating facility with immediate, positive cash flow, and with access to new customers and the benefits of an experienced workforce. A key component of our growth strategy is to expand to the U.S. Gulf Coast and leverage next generation technology to better serve our customers in the Americas. The Business allows us to diversify our geographic footprint benefiting from access to significant U.S. shale gas reserves and well established petrochemical and supply chain infrastructure,” stated Todd Karran, President and CEO of NOVA Chemicals. “Coupled with our recent announcement regarding our plans to form a joint venture with Borealis and Total in Texas, we have taken steps to firmly establish our presence on the U.S. Gulf Coast. We are appreciative for the support of our Board of Directors and owner. This is a clear indication of their commitment to the growth of our business and to these value-adding investments in the Americas,” continued Karran.

NOVA Chemicals will make offers of employment to all employees working at the Geismar plant, along with sales and marketing employees of the Business from Williams’ Houston office.

Closing of the acquisition is subject to customary regulatory approvals and other conditions, but is not subject to any financing condition. The parties expect the transaction to close in summer 2017.

HSBC Securities (USA) Inc. acted as exclusive financial advisor to NOVA Chemicals. Orrick, Herrington & Sutcliffe LLP and Liskow & Lewis are acting as legal counsel. The acquisition is supported by a fully committed bridge financing provided by HSBC Bank USA, N.A. NOVA Chemicals intends to approach the capital markets prior to closing to put in place long-term financing.

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