Alpek, Mexico's largest chemical maker by market value after Mexichem SAB, has 60 days to negotiate exclusively for the Petrobras units, which are known as Suape and Citepe, according to a statement. That period can be extended 30 days.
Alpek SAB is studying a pivot toward South America with a record acquisition in Brazil -- and winning applause from investors.The potential deal would broaden Alpek's geographic footprint by providing entry into Latin America's largest economy. Brazil currently accounts for about 1 percent of sales at Alpek, while the U.S. and Mexico together generate more than 90 percent.
While no further details have been disclosed, the Suape complex has a $943 million recoverable value, an estimate of its potential market price, according to Petrobras's annual report for last year.
A deal along those lines would be Alpek's largest ever. Alfa agreed to a $600 million acquisition from Eastman Chemical Co. in 2010 and spent $185 million the following year for a Wellman Inc. plastic-packaging plant.
A Brazil deal would bring exposure to the nation's grinding recession and political crisis, leading to a challenging short-term outlook, said Armelia Reyes, an analyst at Signum Research in Mexico City. On the other hand, the weak economy might also help Alpek negotiate a cheaper price, she said.
The deal would increase Alpek's polyester capacity by almost 30 percent, Barclays Plc analyst Gilberto Garcia wrote in a note to clients. Alpek raised its 2016 forecast for earnings before interest, taxes, depreciation and amortization by $70 million to $700 million following its quarterly results last month.
The Petrobras units operate an integrated site with a capacity of 700,000 tons a year of purified terephthalic acid, known as PTA, which is used in polyester fibers. The location can also produce 450,000 tons a year of polyethylene terephthalate, or PET, which is used in plastic bottles and packaging.
Citepe operates a polyester filament plant with a capacity of 90,000 tons a year, another potential prize for Alpek.
"The transaction would strengthen its market leader position in the polyester business in the Americas,"Vanessa Quiroga, an analyst with Credit Suisse Group AG, said in a research note. "It would constitute an important move for Alpek."