Finance & strategy

Japanese firms battle weaker global demand

Major Japan-based companies such as Mitsubishi Chemical Holdings, Toray Industries, Sumitomo Chemical, Asahi Kasei, Shin-Etsu Chemical, Teijin, and Tosoh report declines in income for their fiscal first nine months ended 31 December, citing weakening market conditions caused by COVID-19.

SPAC led by former Ashland execs launches $420 million IPO

Anzu Special Acquisition Corp. I, a special-purpose acquisition corporation (SPAC) led by former Ashland CEO William Wulfsohn today launched an IPO of 42 million units priced at $10/unit, aiming to raise $420 million.

PQ Group to sell sodium silicates business for $1.1 billion

PQ Group Holdings announced an agreement to sell its sodium silicate and silica derivatives business, called performance chemicals, to a partnership established by private equity firm Cerberus Capital Management (New York, New York) and Koch Minerals and Trading for $1.1 billion.

Return of the activists?

The first month of 2021 saw two high-profile instances of shareholder activism in the chemical industry, after activists were relatively quiet through most of 2020. Starboard Value LP took aim at Corteva CEO Jim Collins, in a stinging letter outlining what it views as Collins’ disappointing leadership tenure.

M&A quarterly briefing: Recovery continues

The recovery in chemicals M&A activity that began in the third-quarter of 2020 continued into the fourth-quarter of the year, with activity remaining broadly consistent, according to CW data. Volumes also rose on a year-on-year basis.

Solvay to carve out soda ash business

Solvay says it has decided to organize its soda ash and derivatives business into a separate and fully controlled legal structure. “All options are open, and nothing has been decided beyond the carve-out,” Solvay CEO Ilham Kadri told on 24 February following the announcement of the company's 2020 financial results.

AkzoNobel's profits surge on margin management, cost savings

AkzoNobel says its net profit more than doubled in the fourth quarter, to €167.0 million ($210.5 million) from €81.0 million in the prior-year period, driven by strong margin-management and cost-saving programs.

Bain, Cinven to acquire Lonza's specialty ingredients business for $4.7 billion

Lonza says it has reached an agreement with a consortium of private equity firms Bain Capital and Cinven for the previously announced sale of the Lonza Specialty Ingredients (LSI) business and operations, for an enterprise value of 4.2 billion Swiss francs ($4.7 billion).

CW75 rises in roller-coaster year

Ending a year of pandemic, economic, and operational disruption, and consequently massive swings in the stock market, the CW75 index closed out 2020 on a high note. For the 52 weeks to 29 December, the index was up by 10.5%, and stood at its 2020 high.

Albemarle launches $1.3-billion stock offering, expects sequential sales increase

Albemarle said today that it has commenced a $1.3-billion common stock offering, to raise funds for multiple lithium expansion projects. The projects are in Australia, Chile, and the US. Proceeds will also go towards general corporate purposes.

Dow tops estimates as volumes return to pre-pandemic levels

Dow Inc. topped analyst consensus with volume reaching pre-pandemic levels in all operating segments. The company reported fourth-quarter net income of $1.3 billion compared with a year-ago loss of $2.3 billion; year-ago results reflected the impact of a $2.9 billion restructuring charge. Operating EBIT was $1.1 billion, up 2% year-on-year (YOY).

AkzoNobel's offer for Tikkurila becomes binding

AkzoNobel says that today it submitted a binding proposal to acquire Tikkurila, having completed due diligence on the company. The proposal relates to a tender offer for all the issued and outstanding shares of Tikkurila at an offer price of €31.25/share, representing a total equity value of about €1.4 billion ($1.7 billion).

Activist Starboard targets Corteva CEO, aims for majority on board

Activist investor Starboard Value LP (New York, New York) today nominated eight directors to Corteva’s board, aiming for a majority in a bid to replace CEO Jim Collins. The fund announced its intention in a letter outlining what it views as Collins’ disappointing leadership tenure.

Private equity firms to sell Polynt-Reichhold, deal expected to be worth $3 billion

Private equity firms Investindustrial and Black Diamond Capital Management are looking to sell specialty chemicals company Polynt-Reichhold, which they jointly own and control, industry sources tell CW.

PPG narrowly beats estimates on strength in automotive, packaging coatings

PPG Industries today reported fourth-quarter net income down 7% year on year (YOY), to $272 million, on net sales up 2%, to $3.76 billion. Adjusted earnings, which exclude some impairment charges, totaled $1.59/share, up 21% YOY and slightly ahead of analysts’ consensus estimate of $1.58/share, as reported by Refinitiv (New York, New York).

Korean companies report mixed third-quarter results

Leading South Korean chemical companies report mixed financial results for the third quarter. LG Chem and Kumho Petrochemical posted big increases in earnings on strong demand across their respective business lines.

M&A quarterly briefing: Activity picks up from COVID-19 lows

Chemical M&A activity bounced back fairly strongly in the third quarter, after the COVID-19 pandemic ground activity to a halt in the second quarter. M&A volumes and values both rebounded strongly, though they remained below year-ago levels.

Billion-Dollar Club data dive: Margins fall for second straight yea

We take a closer look at some of the figures behind CW's Billion-Dollar Club, including profit margins, capital expenditures and R&D spending. While margins declined for the second consecutive year in 2019, there were variations in trends..

Chemicals investment bank Valence Group adds new capabilities with Piper Sandler

Chemicals investment bank The Valence Group (New York, New York) will add $40 million to its parent company's annual revenues, and broaden its scope with new products and services.

COVID-19 outbreak puts strain on balance sheets

The precipitous drop in demand and volatility in financial markets that has resulted from the coronavirus disease 2019 (COVID-19) outbreak is causing many leading chemical makers to shift capital allocation priorities.

COVID-19: Sasol considers emergency rights issue, accelerated asset sales to reduce debt

Sasol (Johannesburg) said on Thursday it is considering a rights issue of new shares and an accelerated divestment program in excess of the current $2-billion target to raise funds and allay growing investor concerns about its debt.

COVID-19: ACC forecasts decline in US industrial production

The American Chemistry Council (ACC) is forecasting a 2.2% sequential decline in US industrial production in the first quarter of 2020, according to estimates from chief economist Kevin Swift.

COVID-19 to hurt Lanxess's 2020 earnings, company swings to net loss in fourth quarter last year

Lanxess said today it expects its core profit to drop in 2020 as the global coronavirus disease 2019 (COVID-19) outbreak looks set to weaken the company's supply- and delivery chains. It expects 2020 EBITDA to be €900 million–1.0 billion ($1.02–1.13 billion), including an impact from the COVID-19 epidemic of €50-100 million for the year.

COVID-19: Dow estimates $200-million EBITDA impact, "vast majority" of sites remain online

Dow, Inc. is forecasting the coronavirus disease 2019 (COVID-19) will reduce first-quarter EBITDA by around $200 million, approximately half of which is due to reduced sales in China.

GDP growth forecast sinks on COVID-19 fears

The growing economic impact of coronavirus disease 2019 (COVID-19) has resulted in significant downgrades to IHS Markit’s GDP growth forecasts.

COVID-19 clouds earnings outlook beyond the first quarter

The impact of coronavirus disease 2019 (COVID-19) appears increasingly likely to be felt by chemical companies into the second quarter, and possibly beyond, as the number of new cases mounts around the world.

M&A quarterly briefing: Volumes down slightly, but values up strongly

The trajectory of chemical M&A volumes and values diverged during the fourth-quarter of 2019. On a year-on-year (YOY) basis, M&A volumes were down by 7.1%, to 65 transactions, while values more than tripled, from $16.5 billion to $54.0 billion, according to CW data.

Geopolitics, sluggish Chinese economy dent Japanese firms' performance

Major Japan-based chemical companies have released their consolidated results for the fiscal first nine months ended 31 December 2019. Firms such as Mitsubishi Chemical, Toray Industries, Sumitomo Chemical, Asahi Kasei, Mitsui Chemicals, Teijin, Tosoh, and Ube Industries report declines in income citing lower demand and weakening market conditions caused partly by US-China trade friction.

New era of big M&A deals in Japan's chemical sector?

Japan's chemical industry witnessed the announcement of two major M&A deals between domestic companies in 2019. Showa Denko announced plans in December to acquire Hitachi Chemical from Hitachi Ltd. and other shareholders through a tender offer.

Chemicals stocks rebounded in fourth quarter

Chemical industry stocks rallied in the fourth quarter of 2019, as signs emerged that the weak industrial economy may be strengthening. The CW75 index increased by 7.9% during the three months ended 7 January 2020, the most recently available data.

Slower economy weakens South Korean earnings

Major South Korean chemical companies' third-quarter results reflect a slowing in the country's economy.

Billion-dollar-club data dive: Margins slip in 2018 because of decline in APAC

While DowDuPont, Sinopec, and BASF topped CW’s billion-dollar-club ranking for 2018, looking at the industry’s leaders by other metrics can reveal other leaders—and laggards. Here we will take a look at profitability, investment, and some other important metrics for the industry.

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