Brazilian antitrust officials asked for additional information about state-led oil producer and refiner Petrobras' sale of a petrochemical and textile unit to Mexico's Alpek, Petrobras said in a statement Wednesday.
Petrobras agreed to sell Petroquimica Suape and Companhia Integrada Textil de Pernambuco, or Citepe, to Alpek for $385 million in late 2016. The deal still needs full regulatory approval, including by the Justice Ministry's Antitrust Division known as CADE.
"Petrobras will continue to collaborate with CADE to obtain approval of the operation within the legal time frame and will keep the market informed about any relevant decision," Petrobras said.
CADE officials declared the deal "complex," a procedural move that gives antitrust regulators more time to evaluate the impact of the sale on local competition. CADE ordered an economic impact study on the sale by the ministry's internal auditors; ordered Petrobras and Alpek to make a presentation about the economic efficiencies created by the deal; and requested additional information from competitors of Petroquimica Suape and Citepe.
The move also gives CADE officials more time to evaluate the sale, extending the analysis period by 90 days. CADE will now have a total of up to 330 days to approve or contest the sale on competition grounds.
The sale of Petroquimica Suape and Citepe was part of Petrobras' exit from the petrochemicals sector and lifted 2015-16 divestment proceeds to $13.6 billion, according to the company. Petrobras plans to sell $21 billion worth of assets in 2017-2018.
Alpek, one of the world's largest producers of PTA, PET and polyester fibers as well as other plastics and chemicals, furthers its expansion into a key Latin American market. Alpek already operates Styropek Brasil, which produces about 46,000 mt a year of expandable polystyrene in Guaratingueta.
Petroquimica Suape has installed capacity to produce 700,000 mt/year of purified terephthalic acid and 450,000 mt/year of polyethylene terephthalate. Despite being South America's sole manufacturer of PTA, the company has been operating at about 62% of output capacity because of competition from cheap imports.