Neville Prior

PPG CEO Remains Interested In ‘Consensual’ Deal With Akzo

Neville Prior  26 May 2017 10:57:50 AM
Image:PPG CEO Remains Interested In ‘Consensual’ Deal With Akzo
Akzo Nobel shareholders angered by the Dulux paint maker’s rejection of a 26.3 billion euro ($29.5 billion) takeover proposal from USA rival PPG Industries took their fight to an Amsterdam court on Monday.

The U.S. paint maker will challenge a June 1 deadline imposed by the Dutch regulator before which it has to make an offer for Akzo Nobel or walk away for six months, McGarry told reporters on Tuesday in Amsterdam, where the Dutch company is based.

But Michael McGarry, PPG’s chief executive, said: “PPG remains very interested in pursuing a privately negotiated, substantive deal with Akzo Nobel“. McGarry, who was present at the court hearing Monday, also said PPG asked Dutch financial markets regulator AFM to extend a formal offer filing deadline, which now stands at June 1.

Elliott, headquartered in NY, holds a stake of just over 3.0 percent in AkzoNobel but together with other shareholders in favour of the deal with PPG, claims more than 17 percent representation – enough to force a special shareholders’ meeting.

“What PPG wants is for Akzo to hold a proper discussion over the possible combination of both companies”, the lawyer said, also vehemently denying accusations of collusion between PPG and Elliott. That would be the highest offered in the Netherlands, Arnold Croiset van Uchelen, the lawyer representing the US firm, told the court.

De Groot said “the rapid way” in which AkzoNobel’s board had refused the request by Elliott and other shareholders for an extraordinary meeting was “unacceptable”. “That’s a vote of no confidence by itself”, an Elliot representative said.

The Dutch company’s plan to remain independent offers less value for investors and most shareholders are calling for a negotiation, he said. A ruling will be made after the market closes on May 29. At the hearing, he urged the Dutch company to listen to shareholders who are in favor of a deal. Dutch lawyers say it will be tough for the shareholders to convince judges that Akzo’s corporate governance has been so poor as to warrant an investigation.

“Shareholders can fire managers, but they can’t name the new ones”. If Akzo Nobel loses the court case and Burgmans is removed, the paintmaker could resort to using its poison pill measures to seek to reappoint him or someone sympathetic to his views on the offer.

Huntsman & Clariant to Combine

Neville Prior  22 May 2017 08:33:36 PM
Image:Huntsman & Clariant to Combine
Huntsman Corporation and Clariant have announced that their Boards of Directors unanimously approved a definitive agreement to combine in a merger of equals through an all-stock transaction. The merged company will be named HuntsmanClariant. On a pro forma 2016 basis, the combination of both companies will create a global specialty chemical company with sales of approximately $13.2 billion, an adjusted EBITDA of $2.3 billion and a combined enterprise value of approximately $20 billion at announcement.

The combined entity will benefit from each other's strengths. It will have a significantly improved growth profile in highly attractive end markets and geographies. HuntsmanClariant will leverage shared knowledge in sustainability and boast a much stronger joint innovation platform. This will enable the development of new products in order to deliver superior returns and drive shareholder value.

CEO Comments
"This is the perfect deal at the right time. Clariant and Huntsman are joining forces to gain much broader global reach, create more sustained innovation power and achieve new growth opportunities," said Hariolf Kottmann, CEO of Clariant. "This is in the best interest of all of our stakeholders. Peter Huntsman and I share the same strategic vision and I look forward to working with him."

Peter R. Huntsman, President and CEO of Huntsman, commented: "I could not be more enthusiastic about this merger and look forward to working closely with Hariolf Kottmann, a man I have admired and trusted for the past decade. We also look forward to a close association with his immensely talented colleagues around the world. Together, we will create a global leader in specialty chemicals with a combined balance sheet providing substantial financial strength and flexibility."

Transaction Highlights
        •        All-stock merger of equals transaction 
        •        Clariant shareholders: 52%, Huntsman shareholders: 48% 
        •        Huntsman shareholders receive 1.2196 shares in HuntsmanClariant for each Huntsman share (each existing Clariant share will remain outstanding as a share in HuntsmanClariant) 
        •        Board of Directors with equal representation from Clariant and Huntsman 
        •        Global Headquarters in Pratteln, Switzerland, Operational Headquarters in The Woodlands, Texas 
        •        Dual stock exchange direct listing on the SIX Swiss Exchange and the New York Stock Exchange

Value Creation
The new company will accelerate value creation for shareholders through a more robust combination of technology, products and talent. The combined company expects to realize more than $3.5 billion of value creation from approximately $400 million in annual cost synergies. The full synergy run-rate will be achieved within two years of closing. These synergies will be realized by reducing operational costs and improving procurement. The targeted synergies represent roughly 3 percent of total combined 2016 revenue with one-time costs up to $500 million. There will also be additional cash-tax savings.

Corporate Governance
The combined company, incorporated in Switzerland, will be governed by a Board of Directors with equal representation from Clariant and Huntsman and will follow Swiss Corporate Governance standards. Hariolf Kottmann, current Clariant CEO, shall become Chairman of the Board of HuntsmanClariant. Peter Huntsman, current Huntsman President and CEO, will become CEO of HuntsmanClariant. Jon Huntsman, founder and Chairman of Huntsman, shall become Chairman Emeritus and board member of HuntsmanClariant. The merger enjoys strong commitment from both Clariant and Huntsman family shareholders. The company will be listed on the SIX Swiss Exchange and the New York Stock Exchange. HuntsmanClariant will use IFRS, and beginning in Q1 2018 will report in USD and will start filing 10Qs and 10Ks consistent with SEC requirements.

Timing
The transaction is targeted to close by year end 2017, subject to Clariant and Huntsman shareholder approvals, regulatory approvals and other customary closing conditions. Clariant and Huntsman are confident that the required regulatory approvals can be obtained in a timely manner.

Dow to Spend $4 Billion

Neville Prior  19 May 2017 01:40:24 PM
Image:Dow to Spend $4 Billion
Dow Chemical said Thursday it's planning to spend $4 billion in further expansions in the Houston area, at its Michigan headquarters and in Europe.

The chemical giant will keep expanding its largest industrial campus - south of Houston in Freeport and Lake Jackson - to continue taking advantage of cheap and abundant shale natural gas that's used as the primary feedstock to make chemicals and plastics. The expansion will give Freeport the world's largest plant for making ethylene, the primary building block of most plastics, Dow said.

Dow this year is completing a separate $6 billion expansion along the Gulf Coast, primarily in Freeport. That includes a "crown jewel" ethane cracker, which turns ethane, a natural gas liquid, into ethylene. The plant is expected to churn out 1.5 million metric tons of ethylene a year. The cracker project was completed in March, but won't commence operations for a few more weeks or so. The recent expansion added 500 permanent jobs in Freeport.

The upcoming Freeport expansion will add two heating furnaces to the cracker's existing eight furnaces, upping its total ethylene capacity to 2 million metric tons.

Dow also will build a new plastics plant to produce 600,000 metric tons a year, but hasn't announced whether it will be built in Freeport or Louisiana along the Gulf Coast. Dow will expand some its existing polyethylene facilities - polyethylene being the world's most common plastic - throughout to U.S. to increase its total capacity by 350,000 metric tons.

The company will invest $500 million by its Midland, Mich., headquarters for a new innovation centre and to boost its Dow Corning business.

Dow will build a plastics facility with a 450,000-ton capacity somewhere in Europe as well, although the details are scarce.

Dow plans to complete its $130 billion merger with DuPont of Wilmington, Del., in August. The merged DowDuPont would later splinter into three separate companies in 2018 and 2019. Dow CEO Andrew Liveris emphasized recently that Dow's Texas operations would see little effect from the merger. One of the three splintered companies, to be named Dow, would continue to own and run the Freeport complex, as well as DuPont's facilities in Orange near the Louisiana border. The materials science business would operate under the Dow name, the agribusiness under DuPont, and specialty products under a yet-to-be-determined brand.

Cristal Global Announces TiO₂ Price Increases

Neville Prior  17 May 2017 01:58:36 PM
Cristal announced that effective June 1, 2017, or as contracts allow, prices on all TiONA® titanium dioxide (TiO2) products will increase in the following regions. These increases are in addition to previously announced price increases.
·       In Eastern and Western Europe, including Turkey: Prices for all TiONA® titanium dioxide (TiO2) products will increase by €350 per metric ton and in Russia and CIS region by US$350 per metric ton.
·       In Latin America: Prices for all TiONA® titanium dioxide (TiO2) products will increase by US$250 per metric ton.
·      In the Middle East and Africa: Prices for all TiONA® titanium dioxide (TiO2) products will increase by US$250 per metric ton and €350 per metric ton in Euro priced markets.
·      In Asia Pacific: Prices for all TiONA® titanium dioxide (TiO2) products will increase by US$250 per metric ton.

ChemChina and SinoChem to Merge in 2018

Neville Prior  17 May 2017 01:56:46 PM
Image:ChemChina and SinoChem to Merge in 2018
Chinese state enterprises ChemChina and Sinochem are planning to merge next year, creating the world’s largest chemicals group, business newspaper Financial Times (FT) has reported, citing several senior bankers in Asia. Both companies and their leaders have repeatedly denied the merger plans. However, bankers close to the groups and their chief executives say the Assets Supervision and Administration Commission, the government authority that controls the two firms, intends to combine them into one entity that would have total revenues of $100 billion.

Sources say the merger is politically driven and aimed at ensuring ChemChina has the financial strength to absorb Syngenta. Once the $43 billion purchase of the Swiss agrochemicals group is finalized, it will rank as China’s largest overseas acquisition. ChemChina has revealed few details about how it will fund the acquisition, which will be a mix of loans, equity and support from Chinese conglomerate Citic. Both European and US antitrust authorities gave their approval to the ChemChina-Syngenta deal in April, but on condition of some asset sales. China also approved the takeover last month, with India’s clearance still outstanding.

ChemChina and Sinochem each have made a string of acquisitions since the end of 2015, according to the FT, which noted that Sinochem has completed deals worth $1.4 billion, with another $113 million offer pending, while ChemChina has spent $2.5 billion, not including its purchase of Syngenta. Citing people familiar with the matter, the paper said ChemChina’s handling of the Syngenta purchase was received poorly by China’s top leadership. Although the merger fits with the country’s strategy to acquire foreign technology and improve its agricultural yields to feed its population of 1.4 billion, ChemChina’s chairman, Ren Jianxin, is said to have made enemies by initiating the deal without full clearance from the country’s decision makers.

BASF Sees Role of Oil and Gas Unit Declining Further

Neville Prior  17 May 2017 01:16:42 PM
Image:BASF Sees Role of Oil and Gas Unit Declining Further
BASF, the world's largest chemicals maker, said its focus would be on boosting profitability at its chemicals and crop protection businesses as the contribution to earnings from oil and gas, hurt by low crude oil prices, diminishes further. The company, whose products include catalytic converters, vitamins, foam chemicals and engineering plastics, would continue to buy businesses and sell non-core activities to boost growth and earnings stability, Chief Executive Kurt Bock told shareholders at the group's annual general meeting on Friday.

"Traditionally, the Oil & Gas segment has accounted for around 25 percent of EBIT before depreciation and amortisation, but in 2016 this figure was just 15 percent," Bock said.

"It is therefore even more important to improve the profitability of our chemicals and crop protection businesses year after year. In recent years, we have managed to do this by an average of around 5 percent annually," he added.

Bock said the Wintershall oil and gas unit, a subsidiary since 1969, remained a core activity, however.

"We cannot see at all at the moment that oil and gas would not be a good part of the portfolio," Bock said.

Much of last year's decline in group sales by about 13 billion euros to 58 billion euros ($63 billion) was due to a transfer of BASF's gas trading and storage business to Gazprom. That was part of an asset swap under which BASF took a bigger stake in some of Gazprom's Siberian gas fields that will not start production until next year.

Bock said he will still look at takeover targets for BASF's crop protection unit, even though asset prices had increased "dramatically" over the past few years. Rival Bayer said this week it would sell its Liberty herbicide and Liberty Link-branded seeds businesses to win antitrust approval for its acquisition of Monsanto, the biggest chunk of expected asset sales worth about $2.5 billion. BASF is seen as a suitor, after missing out on antitrust-related selloffs by prospective merger partners DuPont and Dow chemical.

Huntsman Announces TiO2 Increase

Neville Prior  9 May 2017 12:11:11 PM
Image:Huntsman Announces TiO2 Increase
Huntsman Corporation’s Pigments and Additives division, now known as Venator, today announced global price increases for all its titanium dioxide pigments. The following increases are effective July 1, 2017 or as contracts allow:

Europe: €250 (Euros) per tonne

Asia Pacific, Africa, Middle East and Latin America: or $250 (USD) per tonne

The following increase is effective June 1, 2017 or as contracts allow:

North America: $0.08 per pound (USD)

Huntsman To Spin Off Pigments Maker Venator Through IPO

Neville Prior  9 May 2017 12:05:12 PM
Image:Huntsman To Spin Off Pigments Maker Venator Through IPO
Texas-based Venator Materials PLC, a subsidiary of global chemicals manufacturer Huntsman Corp., filed an initial public offering Friday that will enable the pigments company to spin off from its corporate parent, advised by Vinson & Elkins LLP.

Woodland, Texas-based Venator listed $100 million as its fundraising target, according to a regulatory filing, though that is typically a placeholder figure used to calculate fees and be significantly raised once final terms are set. Pricing information was not disclosed in Friday’s filing.

Korean Researchers Develop Graphene-Coated Contact Lenses

Neville Prior  8 May 2017 01:27:55 PM
Image:Korean Researchers Develop Graphene-Coated Contact Lenses
People these days spend much of their time staring into the screens of their smartphones and computers, and are continuously exposed to electromagnetic radiation. Electromagnetic waves are a potential cause of eye conditions like cataracts. Now, Korean researchers have developed contact lenses that block radiation while preventing the eyes from drying out. The lenses are coated with graphene, which protects the eyes by absorbing and converting the radiation into heat. At the same time, it prevents the evaporation of tears from drying out the eyes.

In an experiment using egg whites and microwave radiation, the egg under an ordinary contact lens got cooked … while the graphene-coated lens left it uncooked and safe from radiation.

The researchers are now working with a contact lens company and planning clinical tests with volunteers. They believe the graphene-coated lenses will be commercially available within one or two years.

Akzo Nobel Rejects Third PPG Bid

Neville Prior  8 May 2017 12:52:03 PM
Image:Akzo Nobel Rejects Third PPG Bid
Akzo Nobel, the owner of Dulux paint, has rejected a third takeover offer by US rival PPG Industries, leaving the door open to a hostile bid. The Dutch firm said the 26.9bn euro (£22.8bn) offer undervalued Akzo and showed a "lack of cultural understanding of the brand". The company, which claims its own plans for growth are superior, has been urged to reject a merger by the Dutch government and its own workers. But some Akzo investors favour a deal. PPG said it was disappointed by Akzo Nobel's decision and would "review" the firm's response. It comes several weeks after PPG increased its offer to buy the Amsterdam-based firm for the second time as it seeks to create an industry leader in the paints and coatings sector. The US firm suggested the bid was its last friendly attempt to merge with Akzo and has not ruled out putting the matter directly to shareholders.

But responding on Monday, Akzo chief executive Ton Buchner said his team had conducted an "extensive review" of the bid and had again found it wanting. "The PPG proposal undervalues AkzoNobel, contains significant risks and uncertainties, makes no substantive commitments to stakeholders and demonstrates a lack of cultural understanding," he said. Akzo says its own plans for the firm - which involve spinning off its chemicals division into a separate business - would better serve shareholders. It has promised to increase its dividend for 2017 by half and pay a 1bn euro special cash dividend in November. However, it also faces mounting pressure from some of its biggest shareholders to consider a deal, having repeatedly refused to enter talks with PPG's management. Last month, the activist investor Elliot Investors also called for a vote to oust chairman Antony Burgmans - a proposal Akzo rejected.

In its favour, Akzo has won political support against a tie-up, with four provincial governments having warned of its impact on jobs. The company also says that PPG would struggle to get the deal past Dutch competition regulators, which poses a risk to shareholders. As part of its latest offer, PPG offered commitments on jobs and to pay a break fee in case the deal was rejected by officials. In a statement on Monday, it said: "Akzo has once again refused to enter into a negotiation regarding a combination of the two companies, ignoring the best interests of its stakeholders, including long-term shareholders who overwhelmingly support engagement." Akzo Nobel shares fell more than 2% in morning trading in Amsterdam but have jumped about 30% this year.
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