BP sells petrochemical business in $5bn deal

BY Richard Summerfield

BP has agreed to sell its petrochemicals business for $5bn to INEOS in a deal that will boost the oil company’s under-pressure balance sheet.

Under the terms of the deal, INEOS will pay BP a deposit of $400m, followed by $3.6bn when the deal completes and another $1bn in three instalments by June 2021.

The sale will aid BP’s shift in direction. The company announced in February that it planned to sharply cut carbon emissions by 2050, and it intends to announce further plans for this change in September.

The petrochemical business includes stakes in manufacturing plants in the UK, the US, Trinidad and Tobago, Belgium, China, Malaysia and Indonesia, however the petrochemical plants attached to BP’s oil refineries in Gelsenkirchen and Mulheim in Germany will not be sold.

“This is another significant step as we steadily work to reinvent BP,” said Bernard Looney, chief executive of BP, in a statement. “These businesses are leaders in their sectors, with world-class technologies, plants and people. In recent years they have improved performance to produce highly competitive returns and now have the potential for growth and expansion into the circular economy. I am very grateful to our petrochemicals team for what they have achieved over the years and their commitment to BP.”

He continued: “I recognise this decision will come as a surprise and we will do our best to minimise uncertainty. I am confident however that the businesses will thrive as part of INEOS, a global leader in petrochemicals.”

“We are delighted to acquire these top-class businesses from BP, extending the INEOS position in global petrochemicals and providing great scope for expansion and integration with our existing business,” said Sir Jim Ratcliffe, founder and chairman of INEOS. “This acquisition is a logical development of our existing petrochemicals business extending our interest in acetyls and adding a world leading aromatics business supporting the global polyester industry.”

The COVID-19 pandemic has had a significant impact on the finances of oil producers around the world, accelerating BP’s need to cut costs and restructure. BP said the crisis would take as much as £14bn off the value of its assets and is cutting 10,000 jobs worldwide.

News: BP sells petchems arm for $5 billion in energy transition revamp

Amazon acquires self-driving start-up Zoox for $1.2bn

BY Fraser Tennant

In a transaction that it believes “will help bring the vision of autonomous ride-hailing to reality”, online retailer Amazon is to acquire self-driving start-up Zoox for a reported $1.2bn.

The acquisition represents further investment by Amazon in the autonomous car industry, following its participation in a $530m funding round by Aurora Innovation – also a self-drive start-up – in 2019.

At the same time, Amazon has been working on its own autonomous vehicle technology projects, including its last-mile delivery robots – six-wheeled sidewalk-treading bots designed to carry small packages to the homes of customers.

Zoox, however, is Amazon's first acquisition in the autonomous vehicle industry.

“Zoox is working to imagine, invent and design a world-class autonomous ride-hailing experience,” said Jeff Wilke, chief executive worldwide consumer at Amazon. “Like Amazon, Zoox is passionate about innovation and about its customers, and we’re excited to help the talented Zoox team to bring their vision to reality in the years ahead.”

Founded in 2014 with the vision of purpose-built, zero-emissions vehicles designed for autonomous ride-hailing, Zoox's ground-up vehicle focuses on the ride-hailing customer, with tightly integrated features designed to provide a revolutionary passenger experience. The California-based firm’s  approach to invention provides flexibility and the means to iterate rapidly to continuously deliver a superior experience for its customers.

“This acquisition solidifies Zoox's impact on the autonomous driving industry,” said Aicha Evans, chief executive of Zoox. “We have made great strides with our purpose-built approach to safe, autonomous mobility, and our exceptionally talented team working every day to realise that vision. We now have an even greater opportunity to realise a fully autonomous future.”

Aicha Evans, along with Jesse Levinson, Zoox co-founder and CTO, will continue to lead the team post-acquisition, as they innovate – including the development of their robot taxi – and drive towards their mission: to create autonomous mobility from the ground up.

“Since Zoox's inception six years ago, we have been singularly focused on our ground-up approach to autonomous mobility,” concluded Mr Levinson. “Amazon's support will markedly accelerate our path to delivering safe, clean and enjoyable transportation to the world.”

News: Amazon agrees to buy self-driving technology startup Zoox

Road freight merger creates “European industry champion”

BY Fraser Tennant

In a market valued at €400bn, Europe's two largest digital freight forwarders – road transport digitalisation specialist sennder and freight tech company Everoad – are to merge in a deal aimed at building the largest digital road freight platform on the continent.

Once the merger is complete, the new company – to be known as ‘Everoad by sennder’ – will have offices across six countries and lead the way in digital logistics and transportation completing over 35,000 loads per month. Its stated aim is to achieve revenues of €1bn by 2024.

To reach this target, the two freight logistics specialists will pool their technology and knowhow to optimise all the stages of the supply chain. Their digital solution – aimed at both carriers and shippers – reduces inefficiencies in the shipping process, meaning both reduced costs for shippers and increased revenue for carriers.

“With Everoad, we share a vision, DNA and common goals,” said David Nothacker, chief executive and co-founder of sennder. “In the midst of this international crisis caused by COVID-19, road freight has demonstrated its inimitable, strategic role in transporting essential goods. It now makes more sense than ever to join forces and integrate Everoad into the sennder group. In that way, we can jointly invest resources and knowhow to tackle the new challenges and opportunities emerging out of the crisis.”

Since 2015, Berlin-based sennder has strived to revolutionise the world of freight transport in Europe. By merging with its French counterpart Everoad they will further expand their geographic growth journey with local presences across all major logistics and transport hubs.

“Our objective was the same as sennder’s: to create a European industry champion within the freight forwarding and logistics industry,” said Maxime Legardez, chief executive and founder of Everoad. “By merging , we achieved this target and can also contribute to reducing the environmental impact of the industry.” Indeed, the new company sees itself as having a strategic role in reducing carbon emissions in the sector, which currently account for 6 percent of the European Union’s total CO2 emissions.

Mr Legardez concluded: “By becoming Everoad by sennder, we will share our expertise and experience acquired over more than four years of a pan-European vision.”

News: German freight tech start-up Sennder merges with France's Everoad

Texas Capital and Independent Bank abort $5.5bn merger

BY Fraser Tennant

Citing the volatile economic conditions caused by coronavirus (COVID-19), Texas Capital Bancshares and Independent Bank Group have mutually agreed to terminate their $5.5bn merger agreement.

The termination was approved by both companies’ boards of directors after careful consideration of the significant impact of COVID-19 on global markets and on the companies’ ability to fully realise the benefits they expected to achieve through the merger.

“Due to the unprecedented impact of the COVID-19 pandemic, both companies’ boards of directors believe it is in the best interests of our employees, clients and all of our shareholders to focus on managing our business during this time,” said Larry Helm, chairman of Texas Capital Bancshares. “With the talent and depth of our team and strong organic growth model, Texas Capital Bank has built a resilient business with lasting client relationships and a record of value creation through changing market dynamics and economic pressures.”

Neither party will pay any termination fee as a result of the mutual decision to terminate the merger agreement.

“While both companies believed in the benefits of the proposed transaction, it would not be prudent to continue to pursue the combination and integration of our companies at this time,” said David R. Brooks, group chairman and chief executive of Independent Bank Group. “I am confident this is the right decision for our company and our customers, employees, shareholders and other stakeholders. This decision allows us to dedicate our focus and resources toward ensuring the strength of our business, serving the interests of our customers and protecting the health and safety of our employees during these unprecedented times.”

Coinciding with the termination of the merger, Texas Capital Bank president and chief executive Keith Cargill announced that he had stepped down from both roles with immediate effect.

Mr Helm concluded: “Our dedicated team, whose tireless efforts to enhance our clients’ experience and the communities where we operate, will continue to guide Texas Capital Bank’s purpose and success.”

News: Texas banks call off merger, citing coronavirus impact

Covéa’s $9bn deal to acquire PartnerRe called off

BY Fraser Tennant

Citing market dislocation caused by the coronavirus (COVID-19) pandemic, French insurer Covéa has abandoned a $9bn deal to purchase PartnerRe, a Bermuda-based reinsurer owned by investment holding company Exor.

The deal to acquire PartnerRe is the biggest involving a European buyer to collapse due to the COVID-19 pandemic, which has made it increasingly difficult for bidders to close pre-crisis transactions due to drops in share price.

“In view of the unprecedented current conditions and the significant uncertainties weighing on the global economic outlook, we have told Exor that the context does not allow the proposed acquisition of PartnerRe to be carried out on the terms initially envisaged,” explained Covéa in a statement.

In response, Exor, the holding firm of Italy’s Agnelli family, acknowledged the French insurer’s notice that it will not honour its commitment to acquire PartnerRe in accordance with the terms of the Memorandum of Understanding (MOU) announced on 3 March 2020. Furthermore, the Exor board of directors expressed its strong belief that a sale of PartnerRe on terms inferior to those established in the MOU fails to reflect the value of the reinsurer.

“In attempting to renegotiate the agreed deal terms, Covéa has never suggested the existence of a material adverse change, including pandemic risk, or any other issues at PartnerRe that would explain its refusal to honour its commitments under the MOU and we believe that no such basis exists,” said Exor in a separate statement.

The Exor board also stated that PartnerRe, which enjoys one of the highest capital and liquidity ratios in the global reinsurance industry, is not expected to be significantly affected by the COVID-19 outbreak.

An Exor spokesperson said that Covéa is required to pay an indemnity, although the amount due is confidential. However, the MoU between Covéa and Exor stipulated a $175m penalty should Covéa pull out of the deal.

News: France's Covea backs out of $9 billion purchase of Exor's PartnerRe