Mergers & Acquisitions
July 2, 2024
FTC To Sue To Block Tempur Sealy Acquisition
FTC preparing lawsuit to block Tempur Sealy’s $4B acquisition of Mattress Firm
Jul. 02, 2024 7:51 AM ETTempur Sealy International, Inc. (TPX) StockBy: Joshua Fineman, SA News Editor
The Federal Trade Commission is poised to sue to block mattress maker Tempur Sealy’s (NYSE:TPX) $4 billion planned purchase of retailer Mattress Firm. Tempur Sealy ticked lower by 0.5% in premarket trading.
The regulator is concerned that combining the largest manufacturer and retailer would lead to higher prices and that Tempur Sealy (TPX) may discriminate against rival suppliers, according to a Politico Pro report late Monday, which cited three people familiar with the matter.
A lawsuit could be filed as soon as Tuesday, according to the report.
The Politico Pro piece comes after CTFN reported last Tuesday that the companies met with the FTC last week in a last effort to try to convince the regulator to not block the combination.
CTFN also reported on Thursday that the Tempur Sealy/Mattress Firm deal was expected to be the subject of closed door meeting at the FTC on Monday. Tempur Sealy (TPX), which agreed to buy Mattress Firm in a $4 billion deal in May 2023, had agreed to sell off some of its retail stores to try to appease the FTC, according to the earlier CTFN item.
June 24, 2024
Adnoc and Covestro Negotiations Heating Up
Adnoc Said Prepared to Boost Covestro Bid to Nearly €12 Billion
Eyk Henning and Dinesh Nair, Bloomberg News
Officials arrive for a tour of the Ruwais refinery and petrochemical complex, operated by Abu Dhabi National Oil Co. (ADNOC), in Al Ruwais, United Arab Emirates, on Monday, May 14, 2018. Adnoc is seeking to create world’s largest integrated refinery and petrochemical complex at Ruwais. Photographer: Christophe Viseux/Bloomberg , Bloomberg
(Bloomberg) — Covestro AG said it’s entering concrete negotiations with suitor Abu Dhabi National Oil Co. on a potential takeover that could value the German chemical company at about €11.7 billion ($12.5 billion).
The Middle Eastern energy giant indicated to Covestro it’s considering a potential offer of €62 per share, subject to confirmatory due diligence, according to a statement Monday that confirmed an earlier Bloomberg News report. The German company said that level is the “starting point” for the negotiations over an investment agreement.
Covestro agreed to exchange information with Adnoc to help it firm up the bid. Adnoc said in a separate statement that the potential bid of €62 per share is its final offer, indicating it won’t be raising any further after already bumping several times over the course of a year from its first proposal of €55 per share.
A final deal would represent Adnoc’s biggest-ever acquisition. Backed by tens of billions of dollars of oil money, the UAE state company has been scouring the world for deals. Chemicals is a big part of that push as the company sees demand for products that are used to make goods such as plastics continuing to rise over the coming decades even as the energy transition is likely to slow oil demand.
Arne Rautenberg, a portfolio manager at Union Investment who owns Covestro shares, said the potential offer of €62 per share is a “reasonable basis” for entering into concrete negotiations.
“From an investor’s perspective, however, there is still room for improvement,” Rautenberg said. “Covestro is in a better position in negotiations today than it was a year ago. The chemical industry is recovering globally, and so are the profit prospects for manufacturers.”
Bloomberg News reported earlier Monday that Covestro’s supervisory board was discussing its next move after Adnoc sent a formal letter of its intention to sweeten its bid to €62 per share, from €60 apiece, if in-depth due diligence goes well.
Shares of Covestro jumped as much as 7.3% in German trading Monday, hitting the highest intraday level since February 2022. They were up 6% to €54.34 at 3:35 p.m. in Frankfurt.
In recent days, Adnoc received the green light from senior government officials to boost its offer under the condition that it successfully conducts in-depth due diligence, people with knowledge of the matter said.
“We welcome Covestro AG’s decision to commence confirmatory due diligence on the basis of our final offer,” Adnoc said in an emailed statement. “Adnoc is a value-adding, responsible, long-term partner and growth-orientated investor, and we look forward to jointly working with Covestro to swiftly progress due diligence for this important transaction.”
Willingness to Raise
Adnoc had already verbally indicated its willingness to increase its latest bid of €60 per share, worth about €11.3 billion in total, Bloomberg News reported earlier this month. However, Covestro executives were seeking more formal, written assurances from the potential buyer before moving forward, some of the people said.
Covestro said Monday it intends to proceed with the deal negotiations in a timely manner.
“The discussions so far have shown that Covestro and Adnoc can generally reach a common understanding regarding core aspects of a possible transaction including support for Covestro’s further growth strategy,” Covestro said in the statement.
The Leverkusen-based plastics company and Adnoc have been in talks for a year now over a potential transaction that would be the largest acquisition of a European firm by a Middle Eastern buyer. Adnoc first informed Covestro’s management about its takeover interest mid-last year and subsequently improved its initial, non-binding offer of €55 per share to €57 and then to €60 per share, Bloomberg News has reported.
Adnoc has been pushing ahead with other deals in recent weeks. Last month it picked up stakes in gas projects in the US and Mozambique, and has ambitions to expand in chemicals and trading operations globally. It’s also increasing oil production capacity at home.
Other bids to buy Brazilian chemical company Braskem SA collapsed while plans to take out an Israeli company were suspended followed the war in the Gaza Strip. Talks with Austria’s OMV AG about combining their units to create a €30 billion giant has been on hold ahead of Austrian elections later this year. These had given rise to speculation that Adnoc’s dealmaking had lost momentum.
Klaus Froehlich, the former Morgan Stanley banker spearheading most of Adnoc’s international expansion plans, defended Adnoc’s position in an interview last month, saying the company was still pushing ahead with deals.
He added that said Covestro was “a great platform with a fantastic management team,” saying his company is a “firm believer in the future of the chemicals industry.”
–With assistance from Anthony Di Paola, Vinicy Chan and Crystal Tse.
June 17, 2024
Adnoc Covestro Update
Covestro close to granting Adnoc in-depth due diligence – report
Tue, 11th Jun 2024 12:15
(Sharecast News) – Covestro is reportedly close to granting Abu Dhabi National Oil Co. access to in-depth due diligence in expectation of an improved takeover bid, signalling fresh impetus for the talks between both parties after a year of negotiations.
Bloomberg cited people familiar with the matter as saying the German company plans to hold a supervisory board meeting on Wednesday to discuss the issue. It was understood that both firms made progress in recent weeks hashing out key aspects of a combination.
Adnoc has signalled it may slightly sweeten its latest non-binding offer of €60 per share – equivalent to €11.3bn ($12bn) – should the due diligence go well, sources told Bloomberg.
It was understood that the in-depth due diligence, if granted, will likely take place this month and any potential bump would only come in July. Covestro was said to be hoping that it may lead Adnoc to sweeten its bid by around €1 or €2 per share.
Such a step would break an impasse after Adnoc’s most recent bid failed to win over some parts of Covestro’s supervisory board, which refused to give the Abu Dhabi-based energy giant access to core parts of the data room, people familiar with the matter said late last year.
Bloomberg reported earlier this year that to work around the deadlock, Covestro responded to hundreds of questions about its operations Adnoc had asked for. But with the lack of tangible progress to getting a deal done, Covestro’s share price has declined since, increasing pressure on the firm’s management.
A representative for Adnoc declined to comment to Bloomberg while a spokesperson for Covestro said the company is in ongoing discussions with Adnoc “in accordance with our constructive and open-minded manner and in the interests of our company, our shareholders interests of our company, our shareholders and all other stakeholders”.
“As usual, the progress and outcome and the outcome of such discussions will depend on the ability of both parties to agree to agree on issues where they have differing views,” the spokesperson said. “We will continue to report on the outcome of our discussions.”
Earlier on Tuesday, markets blog Betaville said in an “uncooked alert” that Adnoc may have rekindled takeover talks with Covestro. It said there was speculation that Adnoc had recently been tapping up lenders for a debt financing package.
May 28, 2024
Kronospan Acquires Woodgrain Particleboard Facility
Kronospan makes second particleboard facility acquisition in recent months
By Larry Adams
May 23, 2024 | 9:38 am CDT
Particleboard plant in Island City, Oregon.
Photo By Kronospan
Kronospan, a leading producer of wood panel products, has acquired Woodgrain’s Particleboard facility in Island City, Oregon, which is the second particleboard facility purchase in less than a year.
In December, Kronospan closed the purchase of Roseburg’s Simsboro, Louisiana, particleboard facility.
The company said the addition of the Island City plant will strengthen Kronospan’s position in the North American wood panel market and further demonstrates Kronospan’s commitment to its overall growth strategy. Kronospan has expressed its intent to invest in the modernization of the Island City plant upon completion of the post-acquisition period.
“I’m very excited about today’s announcement. The addition of the Island City plant and its talented team will further enhance our ability to serve our customers and provide long term benefit to our stakeholders” said Hans Obermaier, CEO of Kronospan’s North American operations.
Kelly Dame, president and CEO of Woodgrain stated, “It was important for us to find a buyer that is a good fit for our 124 team members, and one that will continue to invest in the plant and its people”
In addition to the Louisiana, particleboard plant, and now the Oregon facility, Kronospan operates wood products sites in North America, including in Oxford, Alabama, a multi-product site with MDF, Particleboard, Laminate Flooring, TFL and other products, and an MDF/HDF plant in Clarion, Pennsylvania.
May 12, 2024
CVC Buys Into Hempel
Private equity CVC Funds buys into Hempel
Photo: Hempel
CVC Funds is becoming a minority investor in the coatings company which has been solely owned by Hempel Foundation for 75 years.
Marcus Hand | May 08, 2024
The move by Hempel Foundation to bring CVC in as an investor into Hempel A/S is designed to help support both its organic growth strategy and to pursue merger and acquisition opportunities.
CVC will as a minority investor subscribe to new shares equating to up to a 30% stake in Hempel over time. The value of the investment was not revealed.
Related: Hempel launches underwater hull inspections using ROVs
Richard Sand, Chair of the Hempel Foundation Board of Directors said that they believed the value of Hempel’s shares would increase more over the next five to 10 years with CVC as a minority shareholder than without.
“The Hempel Foundation has been the sole owner of Hempel for 75 years and has an ongoing commitment to secure Hempel’s financial base and ensure its future growth. After careful consideration, the Hempel Foundation has decided to welcome a minority investor that brings both unique experience and capital to support Hempel’s accelerated growth journey,” he stated.
Related: Hempel invests $100m in new China factory
Hempel Foundation will continue to be the majority shareholder in Hempel.
Michael Hansen, Group President and CEO of Hempel A/S said, “We have already made solid progress on our strategy of driving profitable growth, both organically and inorganically through M&A activity, delivering record-breaking results in 2023.
“This new partnership will considerably strengthen our industry position, will ignite further growth in our winning brands and means we are well-placed to seek out transformative acquisition opportunities.”
From the CVC side, Partner Michael Lavrysen, commented: “CVC Strategic Opportunities invests in high-quality businesses with longer growth horizons, often partnering with likeminded families and foundations looking for specific expertise to advance expansion.”
The transaction is expected to close in the second half of the year subject to regulatory approval.
https://www.seatrade-maritime.com/finance-insurance/private-equity-cvc-funds-buys-hempel
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