Company News
December 17, 2023
Saint-Gobain Streamlining
Saint-Gobain to Sell Majority of UK Foam Insulation Business to Soprema
Published: Dec. 7, 2023 at 1:33 a.m. ET
By David Sachs
Saint-Gobain said it would sell a majority stake in its U.K. foam insulation business to Soprema as part of its disposal plan.
The French construction supplier said late Wednesday that Celotex’s assets will be transferred to a new standalone company, which will be 75% owned by Soprema, a private French waterproofing and insulation firm. Saint-Gobain will retain a 25% minority stake, it said.
The move is part of Saint-Gobain’s streamlining strategy, which includes asset-disposals.
Celotex has two manufacturing facilities in the U.K. and employs 155 people, Saint-Gobain said. The transaction is expected to close early next year.
Financial details were not disclosed.
December 10, 2023
LyondellBasell to Sell EO & Derivatives to INEOS
LyondellBasell Announces Sale of Ethylene Oxide & Derivatives Business and Production Facility to INEOS
HOUSTON, Dec. 8, 2023 /PRNewswire/ — LyondellBasell (LYB) today announced it has entered into an agreement to sell its Ethylene Oxide & Derivatives (EO&D) business along with the production facility located in Bayport, Texas to INEOS Oxide (INEOS).
“This transaction is evidence of our disciplined focus on value creation through the execution of a key pillar of our strategy – growing and upgrading our core,” said Peter Vanacker, LyondellBasell CEO. “Successful execution of this strategic pillar involves making difficult decisions to divest businesses which are not part of our core. We remain proud of the positive cash generation, access to advantaged feedstocks, reliability and highly skilled team that makes up the EO&D business and are excited to have reached an agreement with INEOS to enable the business to continue generating value under different ownership. We look forward to collaborating closely with INEOS on a seamless transition.”
The Ethylene Oxide & Derivatives business in Bayport produces high-quality ethylene oxide and various derivatives. The fully integrated platform with access to cost-advantaged feedstocks and logistics networks has excellent performance and reputation in the market.
Tobias Hannemann, CEO INEOS Oxide said, “We are pleased to announce this strategic acquisition. INEOS is a leading producer in Europe and this significant step expands its Ethylene Oxide & Derivatives business into the US, which is the world’s largest market. It also complements our existing Ethanolamines production facility in Plaquemine, Louisiana.”
The purchase price for the transaction is $700 million. The transaction is expected to close in the second quarter of 2024 following completion of the planned maintenance at the facility and is subject to regulatory and other customary closing conditions. J.P. Morgan acted as financial advisor and King & Spalding acted as legal counsel to LyondellBasell.
https://lyondellbasell.mediaroom.com/index.php?s=43&item=1470
December 10, 2023
Winter is Coming
“Winter Is Coming” For Leveraged Companies
by Tyler Durden
Friday, Dec 08, 2023 – 12:45 PM
Earlier in the year, as regional banks faced a domino effect of failures, Bank of America strategist Michael Hartnett pointed out that every Fed tightening cycle has historically resulted in a crisis.
Given that the Federal Reserve hasn’t allowed a real credit cycle since the early 2000s, prolonged monetary tightening suggests that “winter is coming” for leveraged companies.
“The whole market and companies have been living in this la la land, this fake world of wealth of quantitative easing where you can borrow at 1% or 2%, you can buy anything, you can make lots of mistakes and you’re not going to get called out,” said Paul Horvath, chief executive officer at investment firm Orchard Global.
Horvath, speaking at the Milken Institute’s Middle East and Africa Summit in Abu Dhabi this week, was quoted by Bloomberg. He warned: “Winter is coming, and I don’t think people have enough parkas.”
The asset manager head said financial markets are holding up well so far, given the high rates. He noted corporates are levered up due to private equity firms buying up companies with cheap money, adding a global financial crisis might not be in the cards – but expects there will still be stress.
Bloomberg pointed out there were record levels of dealmaking during the pandemic era of cheap money. This led to a surge in private equity buyouts, backed by leveraged finance and the debt load placed on the target company. A large amount of that debt for junk-rated firms is coming due as large maturity walls approach.
Also speaking at the event was SLR Capital Partners co-founder Michael Gross, who said there is no easy solution for companies needing to refinance this debt.
“It’s going to take more than public markets coming back,” Gross said, adding, “It’s going to probably require private equity sponsors to find unique solutions like putting in more equity or finding preferred investors to step into the capital structures.”
Gross said managing portfolio companies with outdated debt structures will also face challenges for private credit funds.
He explained that funds were structured in a world of “perfection” based on an era of low interest rates, but that has all changed.
A higher for the longer environment with mounting macroeconomic headwinds only means over-leveraged firms are increasingly falling into distressed
The impact of this tightening cycle could be worse than the Great Recession – unless the Fed reverses course.
Rate traders are already pricing more than 100bps of rate cuts for 2024.
Meanwhile, Anne Walsh, chief investment officer of Guggenheim Partners Investment Management, said the US economy “hasn’t had a real corporate credit cycle since the early 2000s,” indicating a “purge is about to happen.”
https://www.zerohedge.com/markets/winter-coming-leveraged-companies
December 7, 2023
Woodbridge Seating JV in India
December 5, 2023
Woodbridge and TM Automotive Seating Systems Enter into a Joint Venture
MISSISSAUGA, Ontario, Canada & TROY, Mich., Dec. 5, 2023 – Today, Woodbridge announced it has entered into a joint venture (JV) with TM Automotive Seating Systems. The JV, to be called TMWB Foam Private Limited, will focus on delivering innovative seating systems to commercial vehicle manufacturers and buses.
“We are pleased to partner with TM Automotive Seating Systems to further strengthen our competitive position within the country,” said Bill Drury, Vice President and General Manager, Asia. “This JV combines Woodbridge’s expertise within the foam industry and TM Automotive Seating Systems’ knowledge of the Indian market to provide both companies an opportunity for growth in the commercial vehicle market.”
The JV will be located in Pune, Maharashtra, India.
About Woodbridge
With corporate headquarters in Mississauga, Ontario, Canada, and automotive headquarters in Troy, Michigan, USA, Woodbridge has more than 7,000 teammates in over 40 locations across nine countries. The company offers material technologies for automotive, commercial, recreational, packaging, healthcare, and building product applications. We provide a full complement of services, including prototyping, consulting, technical support, chemical R&D, and accredited laboratory testing.
December 6, 2023
More Drama in Distribution
Brenntag reshuffles business amid calls for full break-up
By Tristan Veyet and Matteo Allievi
December 5, 20237:40 AM ESTUpdated 2 days ago
Dec 5 (Reuters) – German chemicals distributor Brenntag (BNRGn.DE) said on Tuesday it would reorganise its business into two independent divisions from 2024 as it faces pressure from activist investors to break up the company.
The group’s shares were down 1.6% at 1012 GMT. Analysts had expected a muted share price reaction after no clear split was announced.
In the reshuffle, Brenntag’s essentials unit, a wholesale business for process chemicals, and the specialties arm, which provides services to industries such as nutrition and household products, will each have their own legal structure and leadership.
Brenntag said ahead of its Capital Markets Day event that the structural changes would give the company more options and make it ready for the next strategic steps by 2026, but did not specify what those steps might be.
“Split between two divisions is one option but there could be also other options,” CEO Christian Kohlpaintner said during a press conference.
Brenntag’s management has faced increasing pressure for a break-up of its businesses and a spin-off of the specialties unit from activist investors who have argued the separation would boost the company’s shares.
“There is really no catalyst to buy the shares unless Brenntag announces a clear split of the two divisions before 2026,” Alster analyst Thomas Wissler said.
Brenntag is the latest in a series of old and famous German companies, such as Bayer (BAYGn.DE) and Thyssenkrupp (TKAG.DE), that have been targeted by activist investors to divest part of their business to improve profitability.
As part of the reorganisation, Brenntag will transfer all pharmaceutical activities from the essentials arm to the specialties unit, while moving water treatment and finished lubricants businesses along with some semi-speciality products in the opposite direction.
As a result, the specialties division will account for 30% of the group’s gross profits, while essentials will make up the rest.
Brenntag said it aimed to grow its organic earnings before interests, taxes and amortisation by 7-9% per year until 2027, with 5-7% growth in essentials and 7-9% growth in specialties.
($1 = 0.9240 euros)
(This story has been corrected to attribute descriptions of divisions to correct business units, in paragraph 3)
Reporting by Tristan Veyet and Matteo Allievi in Gdansk; editing by Milla Nissi and Sharon Singleton
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