Goldman and Morgan Stanley cement M&A oligopoly 11 Dec 2015 Both banks landed advisory roles on either side of the $130 bln DowDuPont merger, extending their league-table leads in a record year of dealmaking. They also held the one and two spots during the 2007 and 2000 peaks. Cracking the top tier can be done, but it’s exceedingly rare.
Dow-DuPont reaction could produce $20 bln in value 9 Dec 2015 Combining the chemical giants, each worth nearly $60 bln on Tuesday, would be complicated. A three-way split thereafter might not unlock much value, but would bring focus. Asset rejiggering could allow cost cuts worth almost twice as much as Wednesday’s 10 pct share-price gains.
Dow-DuPont an activist coup on Corporate America 9 Dec 2015 The $60 bln chemical giants are in merger talks, according to reports, a testament to the persistence of pushy investors Dan Loeb and Nelson Peltz. If the companies pull off a deal and a rumored three-way split, it could be this generation’s version of barbarians at the gate.
Airgas schools market on long-term greedy 17 Nov 2015 Shareholders will receive $10.3 bln in cash selling to Air Liquide. That’s a 51 pct premium, which also means Airgas has outperformed rivals and the S&P 500 since early 2010 despite being the target of an unsuccessful hostile bid. Successive CEOs played their hand well.
BASF can withstand pain from cheap oil and China 27 Oct 2015 The German chemical giant has been hit by deteriorating emerging markets. Low oil prices also hurt BASF’s exploration business. A slightly poorer 2015 guidance sent shares down more than 3 pct. But a solid balance sheet and strong cashflow justify the group’s $77 bln valuation.
Syngenta CEO exit opens door to opportunists 21 Oct 2015 Mike Mack will leave the $30 bln Swiss agrochemical company. Shareholders grumbled that the company fumbled a bid from Monsanto. New leadership may be more credible than Mack in cutting costs. Meanwhile, Syngenta looks more open to a bid or a breakup.
Monsanto plants seeds for weathering rough times 7 Oct 2015 Weak grain prices and forex swings battered the crop giant’s earnings, bringing a lower 2016 forecast just weeks after its Syngenta bid collapsed. The whole sector is down, though, and a faster stock buyback and $300 mln of cost cuts will help the company through a lean period.
DuPont succumbs to activist in absentia 5 Oct 2015 Ellen Kullman is retiring as chair and CEO of the $45 bln chemical giant, five months after fending off a pushy Nelson Peltz. Another profit warning and an interim boss who’s a restructuring guru suggest an abrupt transition. DuPont may have to give a breakup another hearing.
Bayer $11 bln plastic IPO looks far from fantastic 21 Sep 2015 The German pharma giant is floating its Covestro division. The unit is cash-generative and well positioned for growth. But it is also a capital-hungry and cyclical business that has destroyed value for years. Bayer might need to be more flexible on the float price.
Monsanto leaves Syngenta facing awkward questions 26 Aug 2015 The world’s largest seed maker has given up pursuit of its Swiss rival. The $46 bln deal required aggressive assumptions and carried risks. Syngenta’s management now needs to prove its reluctance to talk was worth it.
Monsanto $46 bln Syngenta offer deserves a hearing 26 Aug 2015 The U.S. seed giant’s last cash and shares approach to its Swiss rival was rebuffed. Monsanto has offered a little more, but can’t go much higher without destroying value or relying on rosy assumptions. The pressure is on Syngenta to talk, or show investors it has a better plan.
DuPont’s fight against Nelson Peltz rages on 28 Jul 2015 The $50 bln chemical maker may have seen off the pushy billionaire in May, but its shares have since tumbled 20 pct. DuPont now expects lower profit, and dividends from spun off Chemours look shaky. Boss Ellen Kullman soon could find shareholders wondering what might have been.
Fertilizer deal talks emit whiff of exuberance 20 Jul 2015 U.S. nitrogen giant CF Industries is sizing up $6 bln Dutch rival OCI. A combination could bring tax and other savings. CF got the timing right when it bought rival Terra in 2010. This time, prices are falling and new supplies arriving. The M&A enthusiasm looks excessive.
Apollo strains to heed LBO mission control 2 Jun 2015 Leon Black’s private equity shop is paying a headline valuation of 9.4 times EBITDA for specialty chemicals maker OM Group. Side deals will lower the multiple but Apollo’s avowed discipline looks tough in a pricey market. It’s a small buyout that illustrates a bigger industry problem.
DuPont shows three ways to neuter activists 13 May 2015 The chemical conglomerate has defeated Nelson Peltz’s push for four board seats. Decent company performance was DuPont’s sharpest knife. Unveiling a credible financial plan, including the cost of the breakup Peltz once wanted, and appointing respected directors finished the job.
Monsanto heaps pressure on Syngenta 8 May 2015 The U.S. seeds giant has made a $45 bln approach to the Swiss pesticide firm. The target rejected this as too cheap and too risky. Syngenta has a point: there will be major political and antitrust hurdles. But it needs to lay out just how it will create more value on its own.
DuPont investors: give Peltz a chance 27 Apr 2015 Proxy firm ISS is backing the activist and a second nominee. The case isn’t very strong. But Peltz on his own has a track record and a $1.8 bln stake. He’d get a year and then it would be up to the $65 bln chemical group whether to give him an age waiver to stand for re-election.
Costs of split help DuPont in activist fight 7 Apr 2015 The $65 bln chemical maker says Nelson Peltz’s proposed breakup would bring dis-synergies adding up to over $10 bln in present value. The numbers are plausible. Maybe slicing up DuPont would make value-adding cuts easier to deliver – but that’s a tough case for Peltz to make.
Dow Chemical tempts fate with $5 bln chlorine sale 27 Mar 2015 The company is offloading its bleach and vinyl-related chemicals to smaller rival Olin using the esoteric reverse Morris Trust structure. The valuation looks solid, especially considering the tax savings. Yet investors should remain wary given the history of such complex deals.
Starwood and Grace show that "proactivism" can pay 11 Feb 2015 Without any visible activist involvement, the hotel chain decided to spin off its timeshare business, while chemical maker W.R. Grace volunteered to split in two. Investors loved the deals. Uppity shareholders aren’t alone in wising up to carve-up potential – boards are too.