Bidders For Mexican Petrochemical Assets Proceed With Caution

Abstract

Listen

Translate article

As the Latin phrase goes, caveat emptor—let the buyer beware. This seems to explain the hesitation of prospective bidders in Mexico's intended privatization of its petrochemical industry. In November 1995, Petroleos Mexicanos (Pemex), Mexico's national oil company, made its first formal presentation to sell the first of 10 major petrochemical complexes to international chemical producers. The government intends to sell 61 plants within the 10 complexes. But so far, only one bidder—a partnership of two U.S. companies—has publicly announced its interest in vying for Mexico's first offering: the five ammonia plants at the Cosoleacaque petrochemical site, which also contains a p -xylene facility and a hydrogen production plant. Potential bidders seem hesitant to jump at the Mexican government's privatization of its petrochemical properties. In light of the economic recession that Mexico plunged into after it devalued the peso in December 1994, that hesitation is understandable. But it could also be that the p...