Global chemical majors BASF SE and INEOS Industries Holdings today said they have formed a joint venture company, Styrolution, to produce styrene, with an eye on the increasing competition in the Asian and the Middle Eastern Markets.

"BASF SE and INEOS Industries Holdings have made an important step towards the establishment of the joint venture company Styrolution," BASF and INEOS said in a joint statement.

The establishment of the joint venture is subject to approval by the appropriate antitrust authorities, the statement added.

"Styrolution will be capable of meeting the long-term needs of a rapidly changing market as it competes effectively with large-scale producers from Asia and the Middle East," INEOS Capital Chairman Jim Ratcliffe said.

The company will be headquartered in Frankfurt, Germany, it said.

The two companies had announced in November last year their intention to combine their global business activities in styrene monomers, polystyrene, acrylonitrile butadiene styrene, styrene-butadiene block copolymers.

The portfolio also includes other styrene-based copolymers as well as copolymer.

Styrenics are standard in plastics used for casings and packaging and is mainly used in household and office products.

The Germany chemical giant BASF and UK based INEOS group will retain their respective businesses.

In the joint venture, 50% of the shares will be owned by BASF and the rest 50% by INEOS. BASF will receive cash consideration following the completion of the transaction, the statement said.

Both the companies have their presence in India. While BASE has set a company, BASF India, INEOS has acquired a major stake in Lanxess India, that was later re-named as INEOS ABS (India).