Monsanto’s bid defense withers on the vine 29 Jun 2016 The U.S. seedmaker’s disappointing third-quarter performance makes it hard to see how Monsanto can lure chemical group Bayer into sweetening an already frothy $62 bln offer. The suitor may be willing to look past a cyclical dip, but its negotiating position now looks stronger.
Korean suitor could end U.S. chemical bid warfare 7 Jun 2016 Lotte has approached vinyl producer Axiall, which is fending off a hostile $3 bln advance from rival Westlake. Although the Asian interloper didn’t disclose specifics, Westlake is already offering an eye-popping 140 pct premium. The winning sweetener could involve more cash.
Chemours short-selling critic gets it half right 6 Jun 2016 Citron Research says a toxic mix of environmental liabilities and debt could push the $1.5 bln DuPont chemicals spinoff into bankruptcy. Though an overstatement of the bear case, it raises worthwhile questions about the Chemours balance sheet - and DuPont management’s intent.
Deutsche Bank needs BASF to spare its M&A blushes 23 May 2016 Germany’s biggest bank has no role on potentially the country’s largest deal - the $62 bln offer by Bayer for agrochemicals peer Monsanto. Deutsche’s share of global and domestic dealmaking is down. It sorely needs BASF, its own advisory gig, to hatch a successful counterbid.
Monsanto may strain to make case against Bayer bid 23 May 2016 A $62 bln all-cash offer from the German titan exploits a cyclical downturn in global agrochemicals. Even if Monsanto’s profit picks up again as expected, however, investors would have to value it considerably higher to match the takeover price. The bird in hand will be tempting.
Agro giants will have to wait for Malthus boost 23 May 2016 Tougher U.S. laws on tax inversions are one reason why Dutch fertiliser group OCI’s merger with CF Industries is off. But with supply outstripping demand, fertiliser prices are also falling. That’s delaying the price hikes that should come from rising populations.
BASF best leaving Monsanto seeds for the birds 19 May 2016 Bayer’s bid for the U.S. seed maker puts its German rival on the spot. Monsanto and BASF work together on research and there are few other potential merger partners. Yet the maths of a $50 bln-plus counterbid would be a stretch. BASF has sat out other big deals; it can again.
Bayer would risk choking on Monsanto 12 May 2016 The $94 bln German chemical giant may be mulling a bid for the U.S. seed maker. Monsanto, worth $39 bln, would need convincing. A deal pitched at a 30 pct premium is financially feasible, but Bayer would need to raise a lot of cash – and deal with clashing cultures.
Air Products and Evonik neutralize deal imbalance 6 May 2016 The U.S. industrial-gas producer is selling specialty chemicals to its German peer for $3.8 bln. A lofty valuation of 16 times last year’s EBITDA helps Air Products cover a tax hit triggered by the sale. To justify the price, Evonik is rustling up meaningful savings of its own.
Dow-DuPont deal would be tough nut for interlopers 7 Mar 2016 German chemical giant BASF may be considering a counterbid for U.S. rival DuPont. The price would have to include a whopping premium – and cover a $1.9 bln break fee. The tax benefits alone could make the agreed-upon $130 bln union and spinoff with Dow Chemical close to ironclad.
Scalia’s empty seat reverberates beyond Washington 26 Feb 2016 Dow Chemical is paying $835 mln in a decade-old lawsuit that was heading to the Supreme Court. The company decided the conservative judge’s death changed the balance of the outcome and settled. It’s a reminder that politics surrounding the top U.S. bench has real-world effects.
Syngenta up against element of regulatory surprise 3 Feb 2016 The Swiss seed maker says its $43 bln sale to ChemChina shouldn’t raise U.S. national security fears, despite hot-button facets like chemicals, food and China. Yet Philips’ blocked lighting-unit deal shows Uncle Sam can veto without explanation. That’s reason enough to be wary.
Syngenta deal has two big winners, 1.4 bln losers 3 Feb 2016 ChemChina’s $43 bln cash takeover of the Swiss seed maker won’t involve job cuts, management sackings or cheeky tax reduction. Great for Syngenta shareholders and employees; not so for the buyer. Fortunately, the cost is spread widely – among China’s unwitting savers.
ChemChina megadeal will need FrankenFinancing 3 Feb 2016 A near-$44 bln takeover of Swiss agribusiness Syngenta would be one of the biggest deals ever struck by an unlisted buyer. That calls for a monstrous funding package. The target could probably shoulder $16 bln or so of new debt. Big Chinese banks will also need to step up.
ChemChina’s Syngenta bid is prickly for Monsanto 2 Feb 2016 The state-owned group is nearing a $42 bln deal for the Swiss seeds and pesticides group. The cash and friendly nature make it better than a similarly valued offer from Monsanto. The U.S. company could improve its bid or turn its attention to BASF. Neither M&A option looks easy.
U.S. companies off-key singing strong-dollar blues 27 Jan 2016 Apple, DuPont, J&J and P&G blame the greenback’s rising value for lowering quarterly sales. They have a point, but a robust currency helps consumers, importers, service providers, real-estate sellers and others. That’s reason enough for Americans to whistle while they work.
Time for BASF to press the self-help button 27 Jan 2016 The low oil price is hitting the German chemicals giant harder than previously expected, with writedowns denting 2015 operating profit by 18 pct. Investors won’t be best pleased. But BASF has a big oil and gas investment budget it can hack back before considering deeper cuts.
Dow-DuPont tax acrobatics more clever than cagey 15 Dec 2015 The chemical giants’ $130 bln merger and split should avoid any tax on capital gains. One needed contortion is to show that the shareholder rosters overlap. Dodges like so-called inversions have caught flak lately, but this looks more like a convenient fit with byzantine rules.
DowDuPont tests limits of ambitious M&A 11 Dec 2015 A $130 bln union of the U.S. chemical titans is really four deals in one, given a planned three-way breakup to follow. The $30 bln of estimated value creation from cost savings is aggressive. Mergers of equals often become strained. At least the strategic rationale makes sense.