Chemicals

ADNOC German deal is blueprint for Gulf takeovers

1 Oct 2024

The UAE energy giant agreed to buy chemicals group Covestro for $16 bln including debt. It’s paying a big premium, retaining management and injecting extra capital. The terms are a sign of the hoops Middle Eastern buyers must jump through to get hold of sensitive European assets.

Woodside’s deal poses a new green conundrum

13 Aug 2024

Months after shareholders rejected its climate transition plan, the oil driller is buying an ammonia facility in Texas for $2.4 bln to help hit its emissions reduction goals. But the tech and end-uses are questionable. The return gives investors little to cheer, too.

Rentokil flags debugged trend towards mega buyouts

22 Jul 2024

The $17 bln pest control company is being eyed by former BT CEO Philip Jansen, the Sunday Times says. More generous debt markets mean large takeovers are getting easier. But, while the returns on a Rentokil deal look juicy, shareholders may be wary of selling too cheaply.

DuPont’s big breakup could be second-time lucky

23 May 2024

The chemicals giant has merged, split, bought, sold – and created, on its face, little value. But the centuries-old firm’s defining challenge has been how to shed old businesses in favor of new. A final split to create three simple, racier units is a better bet to work.

DSM’s China de-risking plan hinges on booster shot

15 Feb 2024

Shares in the $30 bln Dutch firm surged 14% on plans to hive off its unit that makes vitamins for cattle. DSM is right to steer away from a business hurt by Chinese competition. But management needs it to recover to justify investors’ enthusiasm.

A pinch of salt could unsettle electric-car order

7 Feb 2024

Carmakers Stellantis and BYD are betting on sodium-based batteries. The cells’ bulk and need for more frequent charging mean they may struggle to drive lithium tech off the road. But affordability and the prospect of loosening China’s grip on the industry will spur adoption.

Exxon has a chemical escape hatch

2 Feb 2024

The oil giant earned $36 bln last year thanks to high crude prices, but the future looks dim for fuel demand. The company’s petrochemical business, though, is in the opposite position: Excess supply has driven down prices, but growing demand for plastics promises riches to come.

Wintershall saga reaches logical $11 bln endgame

21 Dec 2023

After flirting with a listing and rival suitors, the BASF-owned German oil group is to merge with $3 bln Harbour Energy. The UK-listed buyer gets a relatively cheap way to bulk up in gas assets. The sellers get to stick around for the ride, courtesy of some funky financing.

ADNOC German oil deal has bad timing, good logic

28 Nov 2023

Abu Dhabi’s energy giant may bid for BASF-owned Wintershall, in a deal worth $11 bln. As the UAE prepares to host the COP28 climate shindig, that’s a bad look. But buying the German group’s pipeline network may suit ADNOC’s wider aim to bulk up in European petrochemicals.

Capital Calls: Bayer breakup

8 Nov 2023

Concise views on global finance: The 40 bln euro German seeds-to-drugs maker is considering splitting off its consumer or crop science divisions, but may still be left with a more unwieldy structure than its pharma peers.

China’s graphite curbs send green warning shot

20 Oct 2023

Beijing is introducing export controls for a key EV battery material, following fresh US tech restrictions. With 90% of global processing capacity in the People’s Republic, the West will struggle to go it alone. Carmakers’ dependence on the People’s Republic is here to stay.

ADNOC has upper hand in $30 bln plastics M&A

24 Jul 2023

The UAE energy giant may merge Borouge and Borealis, the petrochemicals firms it co-owns with Austria’s OMV. Simplification helps both state-owned groups, but neither Vienna nor Abu Dhabi will want to be the minority player. The latter’s control of gas and oil inputs looks key.

Post-it maker 3M is in danger of coming unstuck

19 Jul 2023

A $10 bln settlement with water suppliers over long-lasting chemicals is probably just the start. More lawsuits and a spinoff threaten to saddle the $57 bln conglomerate with liabilities that jeopardize its sacrosanct dividend. If legal costs keep piling up, it will get worse.

West is sleepwalking off healthcare cliff

17 Jul 2023

Europe is scrambling to end its reliance on Chinese raw materials for green energy and chips. But policymakers forget the region sources 80% of ingredients for top medicines in the East. Producing them at home may prevent a crisis but it risks exacerbating public debt piles.

Capital Calls: Thames Water, Bayer

10 Jul 2023

Concise views on global finance: The indebted UK utility secured a pledge from shareholders to cough up 750 mln pounds over the next two years; the German conglomerate could help long-suffering investors by undoing the disastrous Monsanto deal.

ADNOC’s German chemical punt looks a stretch

20 Jun 2023

The Abu Dhabi energy giant is eying Covestro, valuing it at 14 bln euros including debt. The energy crisis has hit the German group’s valuation, and other UAE firms have snapped up European bargains elsewhere. But ADNOC would require synergies to make a deal stack up financially.

Shelved soda ash IPO is a UK wake-up call

15 Jun 2023

Turkish-owned WE Soda dropped plans for an $800 mln London listing after a cool reception from prospective shareholders. The firm blamed their cautiousness. The truth is that Britain’s attempts to fiddle with listing rules to revive the IPO market aren’t fooling shrewd investors.

Brenntag has simple fix for activist feud

14 Jun 2023

The $12 bln German chemicals group is facing a board battle with funds that want it to improve humdrum performance via a breakup. Separating its two units probably makes sense if they can’t both run smoothly. Setting a medium-term deadline to decide would ease the strife.

Capital Calls: London crypto move, Stellantis SPAC

12 Jun 2023

Concise views on global finance: British Prime Minister Rishi Sunak welcomes Andreessen Horowitz’s UK office just as cryptocurrencies face a regulatory crackdown in the US; the European carmaker’s move to back a London blank-check vehicle is less hairy than it sounds.

London ash IPO comes with governance dust cloud

31 May 2023

Turkish-owned WE Soda, which makes an ingredient used for glass manufacturing, may float to cut leverage. Based on peers’ multiples, it’s worth between $6 bln and $10 bln including debt. But a big controlling shareholder, and dicey markets, mean investors may push for a discount.