Lyondell Chemical Company/Basell Refuse to Comment on Potential Merger

| About: Lyondell Chemical (LYO)

Unfortunately, Lyondell Chemical Company (LYO) and Basell continue to refuse to respond to direct inquiries regarding their potential merger. It has become somewhat frustrating at this stage, as there is very little public information available on the regulatory front and the companies appear to be unwilling to provide even the slightest bit of guidance. Nevertheless, some very general observations can still be made at this time.

First, there continues to be no sign of this case in front of the European Commission. This can mean two things. Either there is no need for EU approval or, more likely, the companies are currently working directly with the regulator to assure a simplified review when the formal notification is submitted (if needed). In most cases, this strategy ultimately works in favor of the companies and in the vast majority it results in EU clearance without extensions.

Second, a revise proxy should be filed within the next several days which will hopefully provide some useful information on the regulatory matters. It is not expected that the next proxy will be the definitive proxy, so the LYO shareholder meeting date may not be available. The shareholder meeting will likely be pushed into November for this deal.

Finally, it remains expected that this deal will obtain all necessary regulatory consents without serious delays. As noted previously, the polyolefins markets in every major jurisdictions appear to be sufficiently competitive at this time. There is simply no indication that this combination will adversely affect any of the relevant markets.

Given the lack of substantial information available at this time, narrowing down a closing time frame is quite difficult. It currently looks like this deal will continue through October and probably be completed in mid/late-November 2007.

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