Mergers & Acquisitions
October 9, 2023
A Little About Adnoc
Abu Dhabi’s Adnoc bets on global expansion
Energy major seeks opportunities in renewables, LNG and others
By Reuters
Published: Mon 9 Oct 2023, 8:13 PM
The UAE is refashioning state-owned Abu Dhabi National Oil Company (Adnoc) in the image of an international oil major by stepping up its global expansion and finding new revenue streams.
As part of this strategy, Adnoc told Reuters it was actively pursuing select opportunities in the areas of renewable energy, gas, petrochemicals and liquefied natural gas (LNG).
Two people with knowledge of the matter said the company was on the hunt for LNG assets in Africa and was considering buying Galp’s 10 per cent stake in a multi-billion-dollar natural gas project in the Rovuma basin off the coast of Mozambique.
Adnoc has already bought a stake in an Azerbaijani gas field, has put in an offer with BP for a stake in Israeli gas producer NewMed Energy , has opened takeover talks with German plastics maker Covestro and is looking to create a $20 billion chemicals giant with Austria’s OMV.
The state-owned company also told Reuters it was investing in energy trading. “As part of our international growth strategy, we are focused on expanding our presence in renewables, gas, LNG and chemicals, and are actively pursuing select opportunities, while also investing in and growing our trading capabilities,” an Adnoc spokesperson said in response to written questions.
Adnoc has two trading arms, both set up in 2020: Adnoc Trading, which is focused on crude oil, and Adnoc Global Trading, a joint venture with Italy’s Eni and OMV which is more focused on refined products.
While Adnoc’s deal-making dates back to 2017 when it listed its fuel distribution unit, the pace of change accelerated after a board meeting in November. The board brought forward to 2027 plans to up production capacity to 5 million barrels per day and also approved a five-year business plan and capital spending of $150 billion. “The thinking is to move away from a traditional state oil firm model to more like an IOC (international oil company),” a source with knowledge of the matter said.
The transformation at Adnoc is similar to ongoing changes at state-owned energy giants in Saudi Arabia and Qatar.
The national energy champions – Adnoc, Saudia Arabia’s Aramco and QatarEnergy – drive their economies but were traditionally focused on oil and gas production at home.
Now, as the transition to renewable energy accelerates, the timeline is shortening for the national oil companies (NOCs) to monetise their reserves and they are also doubling-down on opportunities further afield.
To propel its changes, Adnoc has hired more than 3,370 staff, including 28 senior managers, so far this year from companies such as global energy firms, trading houses, banks and consultancies, according to data on employment network LinkedIn.
LinkedIn data shows Adnoc’s headcount is up 13 per cent this year, and by a quarter over the past two years, to about 32,750. The actual number, however, which Adnoc has never disclosed, is now over 40,000, one person familiar with the matter said. “As we continue to grow our business, we are creating exciting opportunities for our talented workforce as we accelerate the transformation, decarbonisation of and future-proof our company,” the Adnoc spokesperson said in response to questions about hiring.
Michele Fiorentino, who was chief investment officer from 2017-2020, confirmed to Reuters that he recently returned to Adnoc from US oil services firm Baker Hughes as executive vice president for low carbon solutions and business development.
Other recent hires include Bart Cornelissen, who left Deloitte to become Adnoc’s senior vice president for group strategy and portfolio last month, according to LinkedIn.
Michael Hafner, a long-time investment banker in the energy sector – most recently at Greenhill & Co and previously at Deutsche Bank and UBS – also joined Adnoc last month as a senior adviser to the executive office for business development.
Other senior managers have recently been hired from Western firms including Morgan Stanley, HSBC, Natixis , Litasco, Borealis, TotalEnergies, Shell and Eni, according to LinkedIn.
Recent senior hires for Adnoc’s trading arms include alumni of Gunvor, Litasco, Shell and TotalEnergies, the employment network showed.
The UAE firm was looking to buy energy trader Gunvor Group last year but talks fell apart because Adnoc wanted a controlling stake and Gunvor’s shareholder only wanted to cede a minority, sources familiar with the matter have said.
“Adnoc wants to expand in Europe, whether it was through Gunvor or organically,” a source with knowledge of the matter said. “Now that the Gunvor deal is off the table, it will focus on organic growth.”
https://www.khaleejtimes.com/business/abu-dhabis-adnoc-bets-on-global-expansion
October 8, 2023
VPC To Buy Prestige Fabricators
VPC Group USA plans to buy former Klaussner subsidiary Prestige Fabricators
Sale would reopen 2 former foam production plants that were closed Aug. 7 when Klaussner also ceased operations
ASHEBORO, N.C. — VPC Group USA, a producer of foam and fiber material, is planning to purchase Klaussner subsidiary Prestige Fabricators for about $7 million as part of a sale of the company’s assets.
The company has sought court approval to buy the assets of Prestige, which also produces foam materials for upholstery. As part of the purchase, it plans to continue the operations, which employed about 27 at its foam plant and 30 at its fabrication plant prior to their closing on Aug. 7. VPC plans to extend offers of employment to some of these workers.
When it closed on Aug. 7, Prestige effectively ceased operations at two foam manufacturing facilities, including a foam plant and a fabrication plant in Randolph County, North Carolina, where Klaussner was based. Klaussner also ceased operations Aug. 7, putting 884 people out of work, including those employed by Prestige. The defunct company went into receivership soon after.
Legal sources describe a receivership as a court-appointed tool that helps creditors recover funds that are owed to them while also helping companies avoid a bankruptcy. This process also is said to help make it easier for a lender to collect funds owed to them in the event a borrow defaults on a loan.
“Based on VPC’s reputation as an industry leading foam manufacturer, the receiver believes that VPC has made a good faith offer and has the ability to consummate the transaction,” Focus Management Group, the general receiver for Klaussner, and Focus agent Michael Grau said in a court filing earlier this month. The deadline for objections to the purchase is 5 p.m. Sept. 28 and the closing date has been scheduled for Oct. 6.
The court filing obtained by Home News Now said that about seven parties expressed interest in Prestige and six executed nondisclosure agreements. Two of those submitted purchase offers.
VPC’s offer was accepted as part of the negotiations and it included a deposit of 10% of the proposed purchase price, with $50,000 as a nonrefundable portion. VPC proposes a cash closing with the intent to acquire substantially all of Prestige’s assets. This includes machinery and equipment, accounts receivable, assignable contracts, personal property leases identified by the purchaser, technology and intellectual property and all proprietary rights to the sellers’ ERP system, to name several key fixed assets.
The filing by the receiver states that “the court should approve the sale to VPC and authorize the parties to enter into the asset purchase agreement because the sale is in the best interest of the receivership estate, its creditors and other interested parties. … VPC’s purchase of the Prestige assets would yield $7 million to the receivership estate, which in the receiver’s business judgment is substantially more than a liquidation process, including more value than prior appraisals have indicated on a liquidation basis accounting for costs of sale.”
It added that VPC’s experience as a foam manufacturer “will aid VPC in the rehiring of former employees that were terminated when Prestige ceased operations in August. Such employment opportunities would likely be unavailable in a liquidation process or if the Prestige assets were otherwise sold to a buyer who did not plan to operate the Prestige business as a going concern. If VPC is able to take over the business operations pursuant to the proposed sale, the impact on the individuals previously employed by Prestige will be mitigated.”
September 10, 2023
Covestro to Discuss Negotiations With Adnoc
Covestro’s supervisory board to discuss negotiations with Adnoc
Today at 14:45
LEVERKUSEN (dpa-AFX) – The supervisory board of plastics group Covestro plans to discuss the start of formal negotiations with prospective buyer Abu Dhabi National Oil Co (Adnoc) this week, according to a report. The news agency Bloomberg reported this on Friday, citing people familiar with the matter. According to the report, the oil company had most recently offered 60 euros per Covestro share, which would give the DAX-listed group a valuation of 11.6 billion euros. Neither Adnoc nor Covestro would comment on the matter when asked by Bloomberg. Covestro is said to have rejected earlier informal offers of 55 euros and 57 euros per share as too low.
On the stock exchange, the news provided a boost: Covestro’s shares shot up by almost ten percent in the afternoon. At last count, the share price was around 52.48 euros, the highest since the outbreak of the Ukraine war.
As Bloomberg further reports, Adnoc is beckoning with investments in the group. According to the report, the oil company could secure a cash injection of $8 billion (7.5 billion euros) if a deal goes through. That would help win over both management and representatives of the workforce.
Adnoc has been expanding its involvement around the chemicals business for some time. The group claims almost all the oil for the United Arab Emirates. It has investment plans of $150 billion to expand its natural gas, chemicals and clean energy businesses worldwide./jcf/nas
August 24, 2023
Does PE Have a Formula for Furniture?
Here’s how Art Van heirs, trustee settled bankruptcy lawsuit
Thomas Lester//Retail Editor//August 24, 2023
WILMINGTON, Del. — An $8 million settlement in federal bankruptcy court was reached on Aug. 23 between heirs of Art Van Elslander and trustee Alfred T. Giuliano, in relation to defunct retailer Art Van Furniture’s sale to private equity in 2017.
Under terms of the settlement, the majority of the settlement will be paid by National Union Fire Insurance Company. The agreement is not an admission by the parties of any of the allegations made, and the trustee released the defendants from all claims.
“Thanks to the parties for working through the issues. This obviously looks like a very sensible resolution,” Judge Craig Goldblatt of U.S. Bankruptcy Court in Delaware said last week when approving the settlement, according to The Detroit Free Press.
Gary Van Elslander, the son of Art Van Elslander, told The Free Press that the family is glad that the suit was settled, but it remains a painful final chapter for the family and employees of the former Warren, Mich.-based retailer.
“Who I feel really bad for is the employees of Art Van,” he told reporter J.C. Reindel. “My father always said that the heartbeat of the company was the people, and that was a fact — and they probably got hurt worse than anyone. The Van Elslander family, our feelings were hurt, my father’s legacy was hurt, but the pain that the employees felt was real, and that I think we probably feel worse about.”
Gary Van Elslander told The Free Press that, ultimately, the push for expansion and bringing in outside leadership helped doom the company.
“I think along the way that some of the culture of the business was lost,” he said. “We had a very driven culture, very hands-on among the executive team with our retail stores, and I think a lot of that was lost. There was management that was hired that was from outside the Detroit area. They really didn’t understand the legacy and the brand of Art Van Furniture as well as they could have, didn’t put enough importance on it.”
In the original complaint, filed March 7, 2022, Giuliano sought to recover more than $105 million in “fraudulent transfers” and more than $84.7 million in certain real properties, among recoveries.
The complaint alleged that Art Van’s sale to Thomas H. Lee Partners in 2017 for $620 million was a highly leveraged transaction, accomplished by stripping the value out of the debtors’ owned real properties and saddled the debtors with an unsustainable debt load for the benefit of the defendants and detriment of the debtors and their creditors.
It stated that prior to the acquisition, Art Van paid less than $23 million per year in total lease obligations and had $136.5 million in total future lease obligations. After a spate of sale/leaseback transactions, the debtors’ minimum lease obligations ballooned to $46 million per year and more than $877 million in total future operating lease obligations.
On March 8, 2020, Art Van filed for relief under Chapter 11 of Title 11 of the United States Code with the U.S. Bankruptcy Court for the District of Delaware. In April 2020, the Chapter 11 cases were converted to Chapter 7.
Just prior to beginning bankruptcy procedures, Art Van ranked No. 14 in Furniture Today’s 2020 Top 100 with $1.043 billion in sales across 192 stores in 2019.
“Eerily Simlar to Klaussner . . . “
August 14, 2023
Not to be Denied?
ADNOC Could Raise Covestro Bid To $12.6 Billion
By Alex Kimani – Aug 14, 2023, 3:30 PM CDT
Abu Dhabi National Oil Co (ADNOC) has signaled a willingness to raise its informal offer to 60 euros per share for a valuation of $12.6 billion for German plastics and chemicals maker Covestro. The latest offer would represent a premium of nearly 30% to Covestro’s closing share price on Friday.ADNOC last raised its informal offer to 57 euros per share in July, although no final decision has yet been made.
ADNOC appears willing to go on an M&A spree: Abu Dhabi’s national oil company is separately in talks with Austria’s OMV regarding a possible merger of the two companies that could form an entity worth $30 billion.
It’s not clear why ADNOC is interested in buying Covestro, considering how badly the petrochemical business has been doing lately. Earlier in August, Covestro reported a 21%Y/Y fall in second quarter revenues to 3.7 billion euros. Covestro is hardly alone, with U.S. oil and gas giants facing a similar fate. Sluggish consumer demand as well as a deluge of new factories coming online over the past few years means petrochemical margins face a protracted downturn. The situation is so dire that Cologne-based Lanxness AG has called it a “Lehman 2” moment for the chemicals industry.
“It’s been a pretty dramatic downturn. With chemicals oversupplied right now, large oil companies will find other areas to invest in,” Joseph Chang, a New York-based analyst at ICIS, has told Bloomberg.
Over the past decade, Big Oil has relied on petrochemicals as a growth engine, acting as a hedge when oil and gas prices drop and a long-term growth driver in the transition to clean energy. Previously, several Wall Street analysts predicted that oil demand will actually grow over the coming decades primarily driven by petrochemicals demand growth. Indeed, Energy Intelligence is not the only bull here. No less than 10 organizations, including OPEC, Exxon Mobil Corp. (NYSE:XOM), and the Energy Information Administration (EIA), have predicted that global oil demand will actually grow over the next few decades and not shrink as most analysts have forecast.
Everchem Updates Archive 
Sign Up for Email Updates