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Arkema may be a takeover target for Saudi Basic Industries Corp. and DuPont

December 20/2011

(Bloomberg) -- Arkema SA (AKE), already cheaper than any of its rival industrial chemical producers, may now be a takeover target for Saudi Basic Industries Corp. and DuPont Co. after deciding to spin off its unprofitable vinyls business.

Since losing a third of its market capitalization in the past seven months, Arkemas combined equity and net debt is now valued at 3.5 times this years earnings before interest, taxes, depreciation and amortization, based on analysts estimates compiled by Bloomberg. The multiple is the lowest among rival chemical producers, including Lanxess AG (LXS), Solvay SA (SOLB), Clariant AG (CLN) and Dow Chemical Co. (DOW), according to data compiled by Bloomberg.

With the sale of a unit thats been hampered by slumping construction spending, Arkema may now attract takeover interest from Sabic, the worlds biggest petrochemicals maker, and DuPont (DD), the largest U.S. chemicals producer by market value, according to Berenberg Bank. The company, which makes chemicals used in everything from athletic shoes to air conditioning, may also lure private equity bidders, said Nomura Holdings Inc. Colombes, France-based Arkema could fetch as much as 70 euros a share in an acquisition, according to Berenberg, a 47 percent premium to yesterdays closing price.

Author:Marina Ivanova
Category:General News
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