Reliance Industries, India’s largest company, is planning a multibillion-dollar purchase of the American assets of LyondellBasell, the stricken chemicals group founded by Len Blavatnik, the Russian-born tycoon.

The Indian industrial group is weighing up acquisitions and a company statement yesterday confirming that it was on the prowl led to a rally in the shares of the company, which is controlled by Mukesh Ambani.

Mr Ambani has made known his ambition to extend the reach of his petrochemical business into foreign markets and Reliance is believed to be interested in LyondellBasell’s strong position in US chemicals. The collapse in January of LyondellBasell under $26 billion (£15.5 billion) of debt left creditors squabbling over a business with a leading position in plastics, such as polyethylene and polypropylene.

A spokesman for Reliance hinted that the company was seeking distressed assets: “The difficult operating environment of the past year has made available several interesting opportunities.”

Speculation in the Indian media about the size of a bid for LyondellBasell ranged from $3 billion to $6 billion. In September, Reliance raised $660 million in a sale of Treasury shares and in September the company had cash reserves of $3.8 billion.

LyondellBasell is expected to leave Chapter 11 bankruptcy protection in the new year. The holding company is half-owned by Access Industries, Mr Blavatnik’s investment vehicle, and ProChemie, a group controlled by Andreas Heeschen, a German tycoon best known for his investment in Heckler & Koch, the arms maker.

ProChemie acquired its stake in LyondellBasell in May, four months after the chemical group’s American businesses and a European finance company sought Chapter 11 bankruptcy protection in the United States. The European businesses, which include chemical plants in Manchester and Birmingham, remain outside the bankruptcy process.

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