Despite Lyondell Basell being a strategic fit, the bid not going through is a better outcome, as it saves Reliance Industries Limited from getting drawn into a bidding war and thus potentially over-paying for the assets. Also, LB would have added more deep cyclical earnings to RIL at a time when RIL’s gas business is improving the company’s earnings profile by adding a more steady cash flow. If RIL has to add cyclicality in order to grow, we believe E&P makes more sense, either for supply security of its 1.24mn b/d refining capacity or for entry into (more…)