BP has agreed to sell its petrochemicals unit for £5.1bn ($9bn) after scrapping plans to float the division on the London stock market.
BP announced plans to hive off Innovene since April last year
The oil giant agreed to sell the business to UK-based company Ineos.
BP said the sale of Innovene was best for its investors as it "removed any uncertainty" over market conditions about the timing of a listing.
Last year BP announced it planned to either spin off or sell the business, which produces plastic goods.
"Innovene has proved to be a very attractive business to its peers in the chemicals sector. This deal is the very best of a number of good offers," BP chief Lord Browne said as he announced the sale.
Chicago-based Innovene employs 8,000 workers in seven countries in North America and Europe. It also generates revenues of £10.2bn each year.
Proceeds of the sale will be returned to shareholders, BP added.
Ineos said that the purchase meant it would become the fourth largest petrochemical firm in the world.
Formed in 1998, the group has grown rapidly and has a workforce of 7,000 in 14 countries. In the UK, it has facilities in Cheshire, Lancashire and south Glamorgan.