February 22, 2024

The Latest from Adnoc

Adnoc to Progress in Covestro Talks Ahead of Potential Bump

Eyk Henning and Dinesh Nair, Bloomberg News

Colored foam samples made from toluene diisocyanate (TDI) sit in this arranged photograph at the Covestro AG chemical park in Dormagen, Germany, on Wednesday, May 9, 2018. Bayer AG sold its remaining stake in Covestro, raising 2.2 billion euros ($2.6 billion) as the German drugmaker closes in on the planned $66 billion purchase of genetically modified seeds supplier Monsanto Co. Photographer: Dario Pignatelli/Bloomberg , Bloomberg

(Bloomberg) — Abu Dhabi National Oil Co. is inching toward an improved bid for Covestro AG after finding a potential way to resolve the impasse over its €11.3 billion ($12.1 billion) pursuit of the German chemical maker, people familiar with the matter said.

Adnoc is working with a consulting firm that’s sent dozens of questions to Covestro about the details of its operations, according to the people. The responses could give the Abu Dhabi-based energy giant enough information to improve its bid to slightly more than €60 per share, the people said, asking not to be identified because the information is private.

Shares of Covestro jumped as much as 8.1% in late Frankfurt trading Thursday. They were up 4.8% at 5:35 p.m. in Germany, giving the company a market value of about €9.4 billion.

In December, Adnoc improved its non-binding offer to €60 per share, up from previous proposals of €57 and €55, Bloomberg News has reported. The latest increase wasn’t enough to win over some parts of Covestro’s supervisory board, which thus hasn’t granted Adnoc full access to its data room, the people said. 

While Adnoc executives were struggling to justify another bump without access to proper due diligence, Covestro’s responses to the latest questions may help bridge the gap, the people said. It’s still unclear how much Adnoc may be willing to increase its bid and whether it will be enough to win over Covestro.

Deliberations are ongoing, and there’s no certainty they will lead to a deal. Representatives for Adnoc and Covestro declined to comment.

Adnoc has been pursuing Covestro since the middle of last year, part of the Abu Dhabi company’s push to diversify internationally. Its overtures come as the European chemical industry struggles with the region’s anemic growth and a weaker-than-expected rebound in China.

Producers including Lanxess AG and BASF SE warned of disappointing earnings last year. Covestro will announce its full-year results on Feb. 29, when investors also expect it to provide an outlook for the current year and beyond. 

Covestro indicated in November it’s on track to generate about €1.4 billion in earnings before interest, taxes, depreciation and amortization in 2024, well below the €2.8 billion it said it could achieve under average market conditions. 

(Updates with share movement in third paragraph.)

https://www.bnnbloomberg.ca/adnoc-to-progress-in-covestro-talks-ahead-of-potential-bump-1.2038028

January 29, 2024

Arsenal Capital Invests in Polycorp

January 29, 2024

Holcim to Spin Off North American Business

Holcim jumps on $30bn plan to spin off North American unit

Holcim Ltd shares jumped after the Swiss cement maker said it will spin off its North American unit into a separate US-listed entity, a move that could unlock a higher valuation for the business.

This content was published on January 29, 2024 – 13:37 January 29, 2024 – 13:37

3 minutes

The US arm had about $11 billion in sales last year — about one-third of Holcim’s total — and could be valued at more than $30 billion, the company said. Holcim shares climbed as much as 14% in early trading, the most since March 2020, and were up 4% as of 12pm Zurich time, valuing the entire company at almost CHF39 billion ($45 billion).

US listings have become increasingly appealing to European companies as a wider investor base and bigger pool of capital offer the prospect of higher valuations. Holcim’s move for its US division follows the decision of fellow materials giant CRH Plc to shift from London to New York last year. 

Reacting to the news, Citigroup Inc. analyst Ephrem Ravi noted that US-listed building-product companies trade at a significant premium to European-listed peers. Zuercher Kantonalbank analyst Martin Huesler calculated the US business’s fair value at around $35 billion to $40 billion.

“It is a big advantage to have a customized capital structure for this business and to be in the US dollar,” Holcim Chief Executive Officer Jan Jenisch said in an interview on Monday with Bloomberg Television. 

Jenisch is stepping down from his role as CEO, and will be replaced by Miljan Gutovic, currently the head of the European business. Jenisch will remain chairman and lead the planned US listing of the North American business. He said the company would consider buybacks to help smooth the transaction.

The US market is growing at a rapid pace as builders race to relieve a chronic lack of single-family homes and meet regulatory pressures for more energy-efficient buildings. The unit expanded through an acquisition spree that broadened its offering of building materials. 

Holcim says the North American business is the No. 1 player in cement and No. 3 in roofing, and it aims to roughly double sales to about $20 billion by 2030.

Jenisch said the US housing market has great momentum, while downplaying risks of policy changes in case of a reelection of Donald Trump in the US presidential election in November. He said “economic policy is very consistent” and infrastructure and housing will remain a priority.

“We have a rockstar business in the US,” Jenisch said. “We will have a very strong capital structure for both companies so plenty of headroom to support the US listing.”

https://www.swissinfo.ch/eng/business/holcim-jumps-on–30bn-plan-to-spin-off-north-american-unit/49167234

January 10, 2024

Q4 Chemical M&A Activity

Chemical Deal Results

http://www.chemicaldeals.com/Results.aspx?searchtext=&quarter=4th+Quarter+2023

December 21, 2023

Recticel to Acquire REX

Recticel acquires REX to create a powerful Western European growth platform for insulated panels

Regulated information, Brussels, 21/12/2023 — 06:55 CET, 21.12.2023

After the acquisition of TRIMO in April 2022, Recticel announces a second major step in deploying its strategy to become a pan-European leader in the insulated panels segment.

Recticel has entered into a final agreement with Mr. Michel Verhelst, founder, to acquire 100% of REX PANELS & PROFILES SA.

REX, located in Tournai, Belgium, is specialized in the production of PIR and mineral wool insulated panels for the construction industry.

REX has a total recently constructed capacity of over 4 million m², utilised at 50%, with room for further expansion, and is perfectly located in Belgium to serve Western European markets.

The acquisition will allow Recticel Group in due course to:

• reinforce TRIMO’s premium strategy in Western Europe whilst doubling current production capacity;
• provide TRIMO access to the PIR insulated panels category, perfectly complimentary to its mineral wool insulated panels;
• accelerate the execution of REX’s growth strategy in the volume segment of the market;
• unlock substantial technical and commercial synergies.

Jan Vergote (CEO Recticel Group): “The acquisition of REX strengthens Recticel’s core purpose to become a leader in high-end sustainable construction through smart insulation solutions. We are impressed with the achievements of Mr. Verhelst and the REX team and look forward to start intensive cooperation upon closing.’’

Michel Verhelst (CEO REX): “Joining forces with the Recticel Group marks an important milestone for REX as it allows the company to grow and expand further. I am excited about the many possibilities and successes that lie ahead for REX and its employees.”

The transaction has an enterprise value of EUR 70 million in cash, with an earn-out mechanism linked to the EBITDA performance over 2024. The valuation is based on the market value of the acquired production assets, including a newly constructed production site that is planned to start up in Q1 2024.

The transaction is expected to be completed in January 2024.

https://www.recticel.com/recticel-acquires-rex-create-powerful-western-european-growth-platform-insulated-panels.html