Chemicals

Saudi’s $69 bln asset rejig collides with reality

11 May 2020

Giant Aramco is trying to cut the price of last year’s deal to buy 70% of chemicals firm SABIC. A discount would give Riyadh’s Public Investment Fund less cash to pivot Saudi’s economy away from oil. Budget concerns make helping the kingdom’s corporate cash cow more important.

EQT finds LBO immunity formula for virus era

7 April 2020

Air Liquide is in talks to sell its disinfectant unit to the Swedish private equity firm for around 900 mln euros. Even with rising medical demand, the purchase looks brave given its rich valuation. Still, the risk of future epidemics could see the buyout group double its money.

U.S. regulators didn’t have to meddle with Altria

2 April 2020

The FTC is suing the Marlboro maker to undo its 35% stake in Juul claiming it eliminated competition. The $12.8 bln investment has been a disaster for Altria and highlights one of many problems from buying disruptors. The market can beat watchdogs to the punch.

DuPont adds old catalyst back to corner office

18 February 2020

Veteran Ed Breen is taking the CEO job as well as remaining executive chairman. The board wants faster improvements at the $39 bln chemicals group than ousted Marc Doyle managed. The success of the creation and three-way split of DowDuPont, partly led by Breen, is in the balance.

Bayer settlement only slightly eases Monsanto pain

24 January 2020

The German chemicals group may spend $10 billion compensating alleged cancer victims of its acquisition’s Roundup weed killer. That would be better than CEO Werner Baumann’s worst fears. But it barely makes his ill-starred $66 billion deal look any better.

ChemChina’s fortunes rest on Syngenta listing

20 December 2019

The state chemicals giant wants to raise $10 bln ahead of a mooted flotation of the Swiss firm it bought in 2016. Boss Frank Ning may settle for a lower valuation, Reuters reports. But the funds will help him pay down big debts, and pave the way for a merger with rival Sinochem.

Japan’s buyout teams face endurance challenge

19 December 2019

Industrial group Showa Denko is buying Hitachi’s chemical arm for $9 bln, disappointing private equity suitors like Bain and Carlyle. Firms are raising record sums in the hope that corporate reforms unleash a wave of dealmaking. Flush with cash, Japan Inc is crashing the party.

DuPont’s latest reinvention risks deal fatigue

16 December 2019

The $26 bln sale of its nutrition unit looks smart on paper. Yet DuPont has been reworking itself for four years, with no real boost for shareholders. Buyer IFF is still digesting another purchase. And closing is over a year away. Even the right deal can be too much of a grind.

DuPont comes out smelling of roses in $45 bln deal

16 December 2019

Executive Chairman Ed Breen is merging his nutrition and biosciences business into International Flavors & Fragrances. He has secured a premium valuation, cash sweetener and a tax-free transfer for DuPont shareholders. IFF gets little besides the dubious benefits of scale.

DSM’s two new heads stretch sustainability halo

2 December 2019

Feike Sijbesma is leaving the $23 bln Dutch maker of food supplements and fibres. In 13 years as CEO, he championed planet-friendly businesses while delivering a 443% return to investors. Handing the job to two subordinates adds a governance challenge to sky-high expectations.

UK $4 bln science LBO tests secondary-buyout craze

21 November 2019

Cinven, Astorg and Abu Dhabi’s wealth fund are taking a drug-testing group off KKR’s hands. The buyer knows the sector and has a clear M&A-driven plan, but the price is high. With tons of buyout cash and weak IPO markets, such eyebrow-raising “pass the parcel” deals will boom.

Altria may have missed chance for merger of equals

27 August 2019

The tobacco giant is talking to Philip Morris, the international arm it spun off in 2008, about reuniting – a combo worth more than $200 billion. Both see their future in e-cigarettes. But Altria’s market cap was closer to equal last year. The ideal moment may have passed.

Transatlantic pet care deal will need grooming

20 August 2019

Elanco is paying $7.4 billion in cash and shares to buy Bayer’s animal-health division. The deal may make more sense for the seller than the buyer. The Eli Lilly spinoff will have to ramp up sales and deliver on ambitious cost-cutting plans to make a success of its acquisition.

Only taxes can close aviation’s carbon gap

29 July 2019

The industry wants its 2050 emissions to be a third those of today. With traffic set to treble by then, that’s unlikely. Electric airliners remain a pipedream and relying on biofuels would mean ploughing up a third of the U.S. Curbing demand via taxes may be the only solution.

DowDuPont shows M&A demands timing – and humility

25 July 2019

Two chemical companies merged to form a $130 billion behemoth and then split into three. The goal was to boost shareholder value. That has so far been thwarted by the business cycle and other factors. Complexity has also played a role. It’s a lesson for ambitious dealmakers.

BASF’s acid stings complacent investors

9 July 2019

The 55 bln euro chemicals group lost 6% of its market value after a trade-war profit warning. Since results are closely linked to industrial production, it’s odd that the company was valued at a historic premium while the global economy cooled. Peers’ shares will feel the burn.

Bayer takes small steps to placate shareholders

27 June 2019

The German drugs and seeds group has hired an expert adviser for its litigation over weed killer Roundup. That boosts the chances of a swift settlement. Yet, if boss Werner Baumann can’t revive Bayer’s lowly valuation and challenged business, pressure to break it up will grow.

Bayer animal-health buyout will need heavy petting

3 June 2019

Private equity groups are itching to get their hands on the German group’s flea-powder and tick-collar unit, the FT says. To earn a decent return, a new owner would need to supercharge sales, boost margins and cut R&D. Even then, the mooted 8 bln euro price tag looks excessive.

Hitachi’s spinoff lacks buyout chemistry

27 May 2019

Bain and KKR are eyeing the Japanese giant’s $6 bln chemicals arm. Steady cash flow, modest debt – plus turnaround prospects – account for the attraction. But it’s pricey relative to rivals, and a splashy push into next-gen telecoms and electric cars could take years to pay off.

Bayer can do more to defuse investor rage

1 May 2019

Shareholders cast a vote of disapproval against the German group’s management following cancer-related lawsuits linked to the acquisition of Monsanto. Yet neither side wants a new CEO or strategy. Revamping the board and boss Werner Baumann’s pay might quell the revolt.