Chemicals

Nobel Peace Prize winner should chasten economists

11 Oct 2013

Fortunately, the Organisation for the Prohibition of Chemical Weapons is far from the economic mainstream. Its existence, however, is a helpful reminder of the power and limits of globalisation, of the importance of governments and of the power of human irrationality.

Solvay pays up to tap into fracking market

7 Oct 2013

The Belgian chemicals group is paying $1.3 bln for Chemlogics, a privately owned U.S. specialist in compounds used in the oil industry. The deal, Solvay’s biggest since 2011, looks pricey. But there should be tax savings, a sales boost, and a chance to ride the global shale boom.

Ackman has Air Products catalyst, now for reaction

26 Sep 2013

The activist hedgie has dislodged the gas firm’s underperforming boss, John McGlade. That quick win brought him a sharp gain of about $100 mln on his 10 pct holding. For bigger, more lasting success, however, a painstaking transformation of the company is now needed.

ThyssenKrupp’s pride well worth 1 billion euros

1 Jul 2013

That’s how much new capital the German steelmaker may need. The RAG foundation, a local rival to the one that controls Thyssen, seems willing to buy a stake. While hurting vanities, this would be an elegant fix to the company’s woes. Pride is a luxury Thyssen can’t afford.

Spinoff wave reaches the Dead Sea

26 Jun 2013

Corporate carve-ups are all the rage. Now Israel’s richest man is joining in. Unravelling his sprawling Israel Corp will be complex but worthwhile. There are still countries where conglomerates make sense. But where capital is easily available, markets much prefer simplicity.

Evonik’s fundamental strengths come at a full price

25 Apr 2013

The listing of the speciality chemicals company marks the largest German IPO since 2007. Evonik supplies compounds for an array of uses from biodiesel and chicken feed to Plexiglas. It has a solid sales and profit record - but a share price at the rich end of fair value.

Lucky coincidences overstate BASF’s success

26 Feb 2013

The world’s largest chemicals company appears to be growing nicely. But it is only cautiously optimistic about the near-term future. Exchange rates and the end of Libyan unrest worked in its favour last year. Such good fortune, in things beyond its control, cannot be relied on.

Evonik finally gets its IPO chemistry right

26 Feb 2013

The German specialty chemicals group has aborted IPO plans three times since 2008. As it prepares to try again, investors should think afresh. Evonik is handsomely profitable and well positioned for growth. It looks like an attractive investment.

Israel may give Canada taste of own M&A medicine

31 Oct 2012

Potash wants to buy the rest of Israel Chemicals it doesn’t own. That would give a foreign firm control over one of the country’s few natural resources and a big role in the iconic Dead Sea. Canada has nixed such overseas takeovers for less - and may now be on the receiving end.

Three-edged blade sharpens case for carve-ups

4 Sep 2012

In a 48-hour span, shares in U.S. government contractor SAIC got a lift from a decision to split the company; DuPont unloaded a slow-growing unit for a good price; and a new study found value creation from divestitures. The fresh evidence should grab the attention of more boards.

NIMBYs are China’s new neighbours from hell

31 Jul 2012

Communities protesting about dirty chemical plants or waste treatment are a rich-country problem come early. Their gripes may be understandable: China faces hefty environmental risks. But appeasing rattled townsfolk drags on growth by lowering the returns from building.

London bankers get swift kick from Boots deal

20 Jun 2012

The UK pharmacy chain’s sale is a bitter pill for the City to swallow. Big banks that backed KKR’s 2007 mega-buyout of Boots were stuck with the debt as the crisis struck. Adding insult to injury, none were hired to advise it on the Walgreen deal. The timing couldn’t be worse.

KKR gets rich prescription for top-of-market LBO

19 Jun 2012

Walgreen’s two-stage acquisition of European rival Alliance Boots should more than double the investment KKR and its partners made at the height of the 2007 boom. What the U.S. drug chain’s investors will get for their money - as much as $16.2 bln - is harder to fathom.

Exxon tweaks chemistry to hedge U.S. gas exposure

1 Jun 2012

The energy giant bet heavily on gas with its $31 bln purchase of XTO. With domestic prices still sagging two years on, the company is set to turn some of its gas into more lucrative chemicals for export. Exxon’s new plant may even do rivals a favor by shrinking the glut of gas.

Canaries in Q4 earnings coal mine looking sickly

9 Dec 2011

DuPont and Texas Instruments now expect weaker fourth quarters. Both say customers in most sectors are reducing inventory to be conservative and raise cash. U.S. multinationals’ earnings have been surprisingly robust – but these bellwethers suggest that may be changing.