Royal Dutch energy giant Shell is attracting interest from several major energy and chemicals companies for its U.S. chemical operations, with the assets potentially fetching as much as $8 billion, according to a report by the Financial Times.
Among the companies reportedly weighing bids are ExxonMobil and LyondellBasell, two major players in the global energy and chemicals industries. Private equity giant Apollo Global Management and the chemicals division of state-owned Kuwait Petroleum Corporation are also said to have expressed interest, the newspaper reported, citing people familiar with the matter.
The potential sale comes as Shell intensifies efforts to reshape its portfolio and dispose of chemical facilities that have struggled to deliver the returns expected from them.
Shell's U.S. chemicals business comprises plants at four locations across Louisiana, Texas and Pennsylvania. The facilities manufacture chemicals used in a broad range of consumer and industrial products, including plastics, detergents and pharmaceuticals.
According to the Financial Times, potential buyers submitted non-binding offers last month, with proposals varying from bids for the entire U.S. chemicals business to offers for individual parts of the portfolio.
The reported valuation of up to $8 billion would represent a significant discount to the amount Shell has invested in the facilities over the years, the newspaper reported. Such a valuation could make the assets attractive to buyers seeking to expand their presence in the U.S. chemicals market while allowing Shell to redirect capital towards areas it considers more strategically important.
Shell, ExxonMobil, LyondellBasell, Apollo Global Management and Kuwait Petroleum did not immediately respond to Reuters' requests for comment made outside regular business hours.
The potential divestment is part of a broader effort by Shell to streamline its operations and concentrate investment on businesses where it expects stronger returns.
Earlier this month, Shell agreed to sell its onshore renewables power business in Europe to TotalEnergies, another indication of the British energy major's strategy of scaling back some of its low-carbon investments while placing greater emphasis on its traditional strengths.
The company has increasingly signalled that it wants to sharpen its focus on upstream oil and gas production and trading, while becoming more selective about capital-intensive businesses that have delivered weaker financial performance.
For prospective buyers, Shell's U.S. chemicals portfolio could offer an opportunity to acquire established production infrastructure and gain exposure to demand from industries that rely heavily on chemical feedstocks. However, the reported gap between Shell's investment in the plants and the potential sale price also highlights the financial challenges facing parts of the chemicals sector.
A final buyer has yet to be determined, and the offers remain non-binding. The process could therefore still change, including through negotiations over individual facilities or the portfolio as a whole.