Johannesburg - Sentrachem, the previously listed chemicals company, was to acquire the 50 percent of plastics manufacturer Safripol it did not already own, Dow Chemicals, Sentrachem's US parent, said late last week.
The deal will mark an end to the impasse around Safripol's ownership.
Dow said Sentrachem had reached an agreement with Hoechst South Africa to buy Hoechst's shares in Safripol and Plastomark, a chemicals joint venture.
There was debate last year as to which company would gain complete ownership of Safripol, whose turnover is estimated at R1 billion a year. At the time, the bid by Hoechst to buy Sentrachem's share sparked a dispute with Dow.
The matter eventually went to arbitration.
Analysts speculated at the time that Hoechst had the right to acquire Sentrachem's stake. They said this right had been triggered when Dow bought Sentrachem for $480 million in December 1997.
Hoechst subsequently said it was selling its share in Safripol for R400 million before debt, and that it was exiting the chemicals industry. As the year unfolded, it became clear that Hoechst's long-term objective was to move into specialty and life sciences.
Buying the Safripol stake, said Vin Sinnott, Sentrachem's chief executive, "is congruent with our stated intention of growing Dow's presence in southern Africa in industry segments where we have particular strengths".
He said Dow would use its global polymer technology and marketing capabilities to complement Safripol's skills and expertise in order to competitively serve the fast growing Southern African polyethylene and polypropylene markets.
Safripol, a polypropylene manufacturing plant based in Sasolburg, produces 160 000 tons of high density polyethylene and 90 000 tons of polypropylene a year.
Dow is one of the world's largest polyethylene producers.