SKC Plans to Spin-Off Chem Business; Will Form PO JV with Kuwait's PIC

:: 13 Aug  2019 ::

Seoul—SKC Co. has received board of directors' approval to vertically spin-off its chemical business and sell a 49% interest in the new separate entity to Petrochemical Industries Co. (PIC) of Kuwait.

In addition, the parties have signed an agreement to form a propylene oxide (PO) joint venture.  The new joint venture company, which SKC and PIC agreed will be valued at $1.195-billion, will include a 45% stake in SKC Evonik Peroxide Korea.

The transaction is expected to close in the first quarter of 2020, subject to regulatory approvals and customary closing conditions.

"SKC has a strategy to achieve an annual production target of 1-million tons of PO," PIC noted.  "SKC believes this joint venture will facilitate the exploration of future opportunities and is an important step towards its strategy."

PIC, a wholly-owned subsidiary of Kuwait Petroleum Corp. (KPC), said the transaction will "enhance" its capacity in downstream derivatives and is an "important" step towards achieving KPC's 2040 petrochemical strategy.

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