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THE WALL STREET JOURNAL: Iran Bid For Shell JV Basell Excludes US Ops Source ( Posted 1 April 05





LONDON -- Iran's National Petrochemical Co. may avoid a political storm if it buys Royal Dutch/Shell Group's (RD, SC) Basell joint venture by not purchasing its U.S. operations, a person familiar with the talks said.


The person told Dow Jones Newswires that Iranian state-owned NPC has submitted a bid that potentially puts it in a strong position, encouraging Shell and its JV partner German chemicals company BASF AG (BF) to pursue a deal with the Iranians despite the political risks.


Shell and BASF agreed last July to review its options on Basell.


U.S. sanctions against Iran mean Iranian companies can't own U.S. assets. Basell owns a plant in Louisiana.


Another person familiar with the matter said NPC has proposed a solution to the potential political problem by avoiding the acquisition of the U.S. part of the business.


Basell may soon make a decision on the preferred bidder, according to the first source, who declined to be more specific.


A Basell spokeswoman wouldn't comment. A Shell spokeswoman said a review of its options on Basell "is still underway. We're bound by commercial confidentiality and are unable to comment on the process or who is currently involved. As we've said in the past, we've not ruled out any options."


A BASF spokesman was unavailable to comment.


The petrochemicals company, which has been valued up to $7 billion, is 50%-owned by Shell and 50% by BASF.


The person confirmed press reports that the two other bidders are Chatterjee Group (CJG.YY) and U.K. company Ineos Chlor PLC, a unit of Ineos (INEO.YY).


The industry players were selected after a consortium of private-equity companies dropped its bid, the source said.


Shell and BASF's "interest is to keep the Iranians in the auction to keep the price up," said one person familiar with Shell .


"They may only refuse (NPC's bid) if they get a warning phone call from the U.S. government," that person added, referring to the U.S. sanctions.


The sale of Basell is part of Shell's plans to dispose of $12 billion of non-core businesses in the next three years.


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-By Benoit Faucon, Dow Jones Newswires; +44 207 842 92 66; 


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