A note to our followers

As many of you know, we’ve been sending a monthly summary of joint venture transaction activity for years. This month is different. The coronavirus has upended corporate M&A departments, and we expect the number of joint venture transactions – both the creation of new and the restructuring of existing – to decline as companies work to figure out how an economic downturn will impact them and their potential partners.

However, if history is a guide, JV transaction volumes will decline less severely than M&A activity, and the number of JV transactions will increase sharply in the early stages of the recovery. We hope that recovery isn’t too far off. In the meantime, we will continue sending monthly updates, and we will remain available if you would like to chat about a JV transaction or restructuring that is ahead of you.

LyondellBasell finalises $2.6 billion China petrochemicals joint venture

March 6, 2020 | Reuters

BEIJING (Reuters) - Houston-based chemical and plastics firm LyondellBasell Industries (LYB.N) said on Friday it had signed “definitive agreements” with a Chinese refiner on a $2.6 billion joint venture to produce petrochemicals in northeast China’s Liaoning province.

LyondellBasell will take a 50% stake alongside Liaoning Bora Enterprise Group, one of a number of independent Chinese oil refiners known as “teapots”. The joint venture will operate a 1.1 million tonnes per year ethylene cracker and polyolefin derivatives complex in the coastal city of Panjin.

Related Water Street Insight: 3 Steps to Negotiating Joint Ventures in China

'None of us want that': Woodside warns on government intervention if negotiations drag

March 11, 2020 | The Sydney Morning Herald

A Woodside executive has warned governments could intervene in its $48 billion Burrup gas processing hub vision if it couldn't lock down negotiations with joint venture partners.

Woodside executive vice president of development Meg O'Neill delivered the subtle barb at the company's Pilbara partners in a keynote speech at the Australasian Oil and Gas conference in Perth on Wednesday morning.

Related Water Street Insight: Financial Modeling for Joint Ventures: The Total Venture Economics Approach

Barrick to pursue Pueblo Viejo mine expansion in Dominican Republic

March 12, 2020 | Mining Technology

Barrick Gold has announced its plans to extend the life of the Pueblo Viejo gold mine in the Dominican Republic beyond 2040.

The Pueblo Viejo mine is a joint venture between Barrick Gold (60%) and Newmont Goldcorp (40%). It is located 100km from the capital city of Santo Domingo.

Barrick noted that it seeks to spend $1.3bn on the proposed expansion of the processing plant and tailings facility at Pueblo Viejo.

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OMV signs agreement to increase its shareholding in Borealis to 75%

March 12, 2020 | Borealis

Today, Borealis’ owners for a purchase price of USD 4.68 billion. As a result, OMV will become the majority shareholder in Borealis in what is a strategic investment to grow in chemicals and accelerate the diversification of the company. Mubadala will retain a significant minority interest with a 25% shareholding. This transaction requires customary regulatory approvals and closing is expected in the fourth quarter of 2020.

Related Water Street Insight: How to Shape Joint Venture Strategy

Anglo American slows $5bn Quellaveco mine construction in Peru due to coronavirus

March 19, 2020 | NS Energy

South African firm Anglo American has announced that construction work is being slowed down at the $5bn Quellaveco copper project in Peru, due to the COVID-19 quarantine measures implemented by the Peruvian Government.

The Quellaveco open-pit mine is being developed 34km east of Moquegua in southern Peru. It is owned by Anglo American Quellaveco, a joint venture between Anglo American (60%) and Mitsubishi Corporation (40%).

The latest move comes as the Peruvian government had announced a 15-day national quarantine to prevent the spread of the coronavirus outbreak.

Related Water Street Insight: BHP, Vale & Brazil Miner Samarco: In JVs, Liability is Never Clean

TEPCO and Ørsted agree to establish a joint venture company for offshore wind in Choshi

March 18, 2020 | Orsted

Tokyo Electric Power Company Holdings, Incorporated (TEPCO), the largest power company in Japan, and Ørsted A/S (Ørsted), the world's leading offshore wind developer, announced today that they have agreed to establish a joint venture company, Choshi Offshore Wind Farm K.K., with the intention of working towards a joint bid in the Choshi-city offshore wind promotion area.

In January 2019, TEPCO and Ørsted signed a memorandum of understanding to work jointly on offshore wind projects and have since then been working together to establish a framework and organizational structure for joint development of the Choshi Offshore Wind Project.

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Exclusive: Coronavirus, gas slump put brakes on Exxon's giant Mozambique LNG plan

March 20, 2020 | Reuters

JOHANNESBURG/MILAN (Reuters) - Exxon Mobil is likely to delay the greenlighting of its $30 billion liquefied natural gas (LNG) project in Mozambique as the coronavirus disrupts early works and a depressed gas market makes investors wary, six sources told Reuters.

Top U.S. oil and gas company Exxon said on Tuesday it was evaluating “significant” cuts to capital spending and operating expenses. Energy firms worldwide have slashed spending this month as oil prices plummeted to 18-year lows after global travel curbs and reduced economic activity destroyed demand.

Related Water Street Insight: Split Ends: How to Exit a JV by Untangling the Assets

OneWeb files for bankruptcy, blames COVID-19

March 30, 2020 | Fierce Wireless

OneWeb, whose mission was to bring connectivity to everyone everywhere, filed for Chapter 11 bankruptcy protection just about a week after launching its latest round of satellites.

The move wasn’t entirely unexpected, as reports surfaced before the March 21 launch that a bankruptcy filing might be in the offing. In the end, the company blamed the coronavirus for upending the markets so much that it couldn’t obtain needed financing.

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