Chevron (NYSE:CVX) is interested in acquiring Phillips 66's (NYSE:PSX) stake in their Chevron Phillips Chemical joint venture, though no formal discussions are currently taking place, Bloomberg reported Wednesday.
The potential deal comes after activist investor Elliott Investment Management urged Phillips 66 to exit the venture, estimating its stake could be worth around $15 billion. However, the valuation depends on chemical margins, which are currently near multi-year lows.
Chevron CEO Mike Wirth has expressed interest in expanding exposure to petrochemicals, citing "robust demand growth" as more people enter the middle class globally and industries seek lighter, energy-efficient plastics for vehicles and aircraft.
Under the terms of the joint venture, both companies hold a right-of-first-refusal over each other's stakes, meaning Phillips 66 would need to offer Chevron the chance to buy before selling to a third party.
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