Chemicals

Clariant-Huntsman gives way to post-activism chill

27 Oct 2017

The scrapped $14 bln merger between two chemicals makers is not worth mourning; Clariant has other ways to create value. The near-term risk lies in activist duo White Tale, whose 20 pct stake killed the deal. Investors can’t tell whether they will be a catalyst or an inhibitor.

BASF plants fertile crop from Bayer’s blighted M&A

13 Oct 2017

The German chemicals group will pay 5.9 bln euros for a seeds business that Bayer must sell to clinch a takeover of Monsanto. A pledge to keep staff means few cost savings, but the deal should work in time. BASF shareholders will reap a better harvest by eschewing mega-mergers.

China’s oil giants brace for electric car crash

9 Oct 2017

Beijing's move against gasoline means tough times ahead for the country's oil majors. The rapid push into new energy vehicles will curb demand for imported hydrocarbons, but at the expense of state giants like Sinopec and PetroChina. It might also pressure crude prices.

DowDuPont gives blueprint for activist compromise

12 Sep 2017

It hasn't been pretty. But several activists, lots of money, plenty of fighting and years later, the merging Dow-DuPont reached a plan that shareholders, even both Dan Loeb and Nelson Peltz, now support. Somewhere in this chemical romance, there's a lesson for P&G and others.

Akzo investors get whiff of reality. It smells bad

8 Sep 2017

The Dutch paint maker promised much better earnings in its defence against an attractively priced takeover by U.S. rival PPG. A profit warning for 2017 shows Akzo will struggle to meet its fanciful targets. But it’s hard for new chief Thierry Vanlancker to wipe the slate clean.

Harvey’s damage will long outlast the storm

31 Aug 2017

The sun is out over South Texas but the toll from the hurricane’s record rains keeps rising. With refinery closures extending eastward and a chemical plant exploding, the governor says losses could top Katrina’s. Gas shortages and surging prices will spread the economic fallout.

Elliott finds part-victory in Akzo defeat

16 Aug 2017

The U.S. activist failed to arm-twist the Dulux paint maker into a merger with PPG. The Dutch group has, though, committed to a full breakup and put two solid new members on the board. It’s a decent result for Akzo’s investors – although less than Elliott’s might have wanted.

Akzo and Elliott are trapped in a lose-lose battle

11 Aug 2017

The Dutch paint maker has won a legal victory over its biggest shareholder, which is trying to oust the chairman. The increasingly pointless fight is likely to drag on beyond September’s shareholder meeting unless new CEO Thierry Vanlancker can make both sides see sense.

Israeli water deal is a glass half full

7 Aug 2017

Mexichem leaked $220 mln of value on its $1.9 bln purchase of Permira- and kibbutz-backed Netafim. With global populations, drought and pollution growing, though, the drip-irrigation pioneer should fill its new owner’s coffers. India and China, especially, have yet to be tapped.

India’s pesticide kings have fertile base for M&A

25 Jul 2017

UPL may bid more than $4 bln for part of Platform Specialty, the U.S. group backed by Bill Ackman's hedge fund, Reuters says. While overseas deals have led many Indian companies astray, a trim balance sheet and a solid deal-making history offer a chance to rewrite the record.

Akzo adds new gloss to disdain for investors

25 Jul 2017

The Dutch paint maker has to convene an emergency meeting to formally appoint Thierry Vanlancker as the new CEO. Its timing is designed to prevent irate activists from forcing a vote on Chairman Antony Burgmans’ future. This is an ill-advised disregard for shareholder democracy.

Akzo’s misguided strategy will weather CEO change

19 Jul 2017

The Dutch paint maker’s new boss Thierry Vanlancker inherits his predecessor’s fanciful mid-term targets. The goals are backed by Chairman Antony Burgmans, a key opponent of a deal with PPG who may now find his position strengthened. Real change at Akzo is even less likely.

Elliott renews totemic siege of Dutch boardrooms

7 Jul 2017

The U.S. hedge fund has launched a new legal bid to dismiss Akzo Nobel chair Antony Burgmans. The move may not revive the Dutch group’s sale to PPG that Elliott wants. Yet after defeat in a separate case, it shows activist investors haven’t given up on the Netherlands just yet.

Activists are helpful reagent at Huntsman-Clariant

4 Jul 2017

Hedge funds with a combined 7.2 percent stake in Swiss chemicals maker Clariant want to stop it merging with U.S. peer Huntsman. They have a good case – and the market had already marked the deal as a dud. It will be hard to salvage in a way that pleases investors on both sides.

Lotte’s Malaysia IPO has bad chemical reaction

4 Jul 2017

The South Korean conglomerate is raising $877 mln through a cut-down IPO of its petrochemical unit. It still ranks as Malaysia's biggest listing since the 1MDB crisis. But a chunky valuation discount to peers suggests toxic air around the issuer and destination is yet to clear.

Dow boss gets in way of own ambitious deal

29 Jun 2017

Andrew Liveris wanted the $150 bln union with DuPont, now under way. But Glenview Capital dislikes the recent extension of his tenure. Like Dan Loeb's Third Point, the investor also wants tweaks to the post-merger breakup plan. The Dow CEO is stuck between his job and his vision.

Akzo is emblem for new “fortress Europe”

1 Jun 2017

The Dutch maker of Dulux paint thwarted a generous 25 bln euro takeover attempt from U.S. rival PPG without putting forward a convincing financial defence. As European governments reach for more power to fend off unwanted mergers, Akzo has shown how shareholders can lose out.

Shareholders are best judges of PPG’s Akzo bid

30 May 2017

A Dutch court threw out activist Elliott’s attempt to force talks between the paint maker and U.S. suitor PPG. That still leaves the other option: for PPG to appeal directly to shareholders. The 25 bln euro price looks attractive, and there is little downside in going hostile.

ChemChina creates new strain of LBO funding

26 May 2017

The chemicals giant is refinancing the debt backing its $44 bln purchase of Switzerland’s Syngenta. This involves less equity than a typical leveraged buyout, and $18 bln of perpetual bonds sold to three Chinese entities. This is M&A finance cross-bred with government policy.

Clariant-Huntsman tests formula for big M&A

22 May 2017

The $14 bln Swiss-American chemicals merger stacks up strategically, is fairly priced and could create $2.6 bln in post-tax savings. Yet the market initially factored in only half of the upside. The unpredictability of antitrust vetting and U.S. politics may explain the gap.