ExxonMobil and others compete for Shell's $8 billion U.S. chemical assets

en.Wedoany.com Reported - On August 24, Shell's planned sale of its U.S. chemical assets has attracted bids from ExxonMobil, LyondellBasell, Apollo Global Management, and the chemicals division of Kuwait Petroleum Corporation, with the transaction potentially valued at up to $8 billion.

Potential buyers submitted non-binding preliminary bids in July, with proposals ranging from acquiring Shell's entire U.S. chemicals business to purchasing individual plants or assets in separate deals. These bids remain indicative proposals at the early stage of the transaction and do not signify that Shell has selected a buyer, nor do they constitute a binding acquisition agreement.

The business comprises four chemical manufacturing sites located in the U.S. states of Louisiana, Texas, and Pennsylvania, producing ethylene, propylene, butadiene, phenol, acetone, alpha-olefins, ethylene glycol, and polyethylene, primarily serving the plastics, detergents, pharmaceuticals, coatings, and personal care products manufacturing sectors. Shell's main chemical manufacturing footprint in the U.S. includes Deer Park, Geismar, Norco, and Shell Polymers Monaca.

Shell Polymers Monaca is the largest capital investment among the assets in the portfolio. Located in Pennsylvania, the facility commenced operations in November 2022, with Shell investing approximately $14 billion in total. It is designed to produce 1.6 million metric tons of polyethylene pellets annually. The plant uses ethane from the Marcellus and Utica basins as feedstock, supplying products to the U.S. packaging, consumer goods, and industrial products markets. If this plant is included in the final transaction scope, the overall valuation of up to $8 billion would be significantly lower than Shell's cumulative capital investment in its U.S. facilities.

The other three sites are primarily concentrated along the U.S. Gulf Coast. Deer Park produces ethylene, propylene, butadiene, benzene, phenol, and acetone, with an integrated ethylene capacity of approximately 834,000 metric tons per year; Geismar produces alpha-olefins, fatty alcohols, ethoxylated alcohols, ethylene oxide, and ethylene glycol, with an annual linear higher olefins capacity of approximately 920,000 metric tons; Norco operates as an integrated complex with refining facilities, with annual ethylene and butadiene capacities of approximately 1.372 million metric tons and 260,000 metric tons, respectively. The different sites vary in feedstock sources, product slates, and downstream customers, offering multiple combinations for a full sale or split transactions.

Shell's restructuring of its U.S. and European chemical assets began in 2025. In March 2025, the company initiated a review of strategic options for the relevant assets, including divestment, bringing in partners, and adjusting certain production facilities. Shell's 2025 annual report further classified its U.S. chemical assets as a portfolio seeking strategic and partnership opportunities. The current submission of preliminary bids by potential buyers indicates that the restructuring has advanced from asset evaluation to the buyer screening stage.

Operating data also reflects the earnings pressure facing Shell's chemicals business. In 2025, the company's chemical sales volumes fell from 11.875 million metric tons in the prior year to 9.26 million metric tons, a decline of approximately 22%; chemical plant utilization rose from 76% to 78%, but chemical product margins continued to face pressure. During the same period, adjusted earnings for the chemicals and refined products business fell from $2.934 billion to $1.051 billion, with the adjusted loss from the chemicals sub-business widening by $693 million compared to 2024. Shell cited lower margins, adverse tax movements, and weak market conditions as the primary contributing factors.

The bidding process also features the simultaneous participation of industrial buyers and financial investors. ExxonMobil and LyondellBasell already operate large-scale petrochemical production and marketing systems, Kuwait Petroleum Corporation's chemicals division has upstream feedstock and chemical business foundations, and Apollo Global Management represents private capital participating in the portfolio bid. The proposals submitted by the various parties cover both full acquisitions and split acquisitions, and Shell can choose its subsequent transaction path based on the product mix, operating performance, and valuation of each plant.