Dow, DuPont set Aug. 31 for closing of historic chemical merger

MOSCOW (MRC) -- Dow Chemical Co. and DuPont Co., the two largest U.S. chemical makers, have received all the regulatory approvals needed to close their historic merger, said Bloomberg.

The deal will be completed after the stock market closes on Aug. 31, the companies said in a statement Friday. Shares of DowDuPont Inc. will begin trading Sept. 1 under the ticker DWDP.

The companies, with a combined market value approaching USD150 billion, would surpass BASF SE as the world’s largest chemical company. Within 18 months of closing, DowDuPont has said it will split into three separate companies focused on agriculture, specialty products and materials.

In response to investor concerns, the boards of both companies are reviewing the planned three-way separation to determine what combination of spinoffs would create the most value for shareholders. The review is being led by Dow Chief Executive Officer Andrew Liveris, DuPont CEO Ed Breen, DuPont lead director Sandy Cutler and Dow lead director Jeff Fettig.
MRC

MOSCOW (MRC) - Negotiations on the prices of European polyvinyl chloride (PVC) for supplies to the markets of the CIS countries had started last week. Despite the unchanged price of ethylene, European producers have further reduced PVC export prices, according to ICIS-MRC Price report.

August contract price of ethylene was agreed at the level of July, which makes it possible to talk about the rollover of August PVC prices. Nevertheless, European producers went for a price reduction, which was partially offset by the growth of the euro against other currencies. Some producers' price reductions had reached EUR20/tonne from the July level.

In general, negotiations over August shipments of suspension polyvinyl chloride (SPVC) to the CIS countries were being held in the range of EUR790-850/tonne FCA, whereas July deals were done in the range of EUR800-870/tonne FCA.

The supply of polyvinyl chloride at the most producers has grown significantly. Moreover, in August, even those producers, who for a long time refused to supply PVC in the CIS, were going to resume export sales.
MRC

MOSCOW (MRC) -- Clariant and Huntsman Corporation have presented a first update on the planned merger of equals to keep their shareholders informed, reported GV.

According to the companies, the preparations to create HuntsmanClariant, a leading global specialty chemicals company, are showing continued strong progress and are proceeding as planned with an unchanged closing targeted for December 2017 / January 2018.

Clariant and Huntsman have agreed on a joint strategic direction for near- and long-term value creation based on continued focus on higher growth and higher margin businesses, expansion of existing strong downstream presence, reaping benefits of complementary product portfolios and breadth of reach to deliver an additional organic sales revenue growth of around 2 % p.a. at approx. 20 % EBITDA margin and delivering synergies in excess of USD 400 million as well as the USD 25 million tax savings.

The merger brings together two strong specialty chemicals businesses with similar EBITDA margins at 17.2 % (including synergies). It will reap complementarity benefits between Performance Products, Care Chemicals and Natural Resources, which represent approx. 35 % of HuntsmanClariant combined sales and hold a comprehensive surfactants portfolio in high-end niche markets globally. It will have meaningful opportunities for growth including cross-selling potential and new product applications. The complementary assets and geographic fit provide significant commercial opportunities and more global reach within established routes to market. Furthermore, HuntsmanClariant will take advantage of its broad asset base while continuing to move downstream into specialties and more differentiated applications. As a result of these complementary product portfolios and structures, additional organic sales revenues of around 2 % p.a. at approx. 20 % EBITDA margin have been identified.

HuntsmanClariant’s position will further benefit from complementary R&D and technological expertise as well as shared knowledge in sustainability and cross-fertilization in innovation and technology capabilities.

Clariant and Huntsman said the portfolio management principles and capital allocation plans of the new company are fully aligned. There is a clear joint understanding of the combined company’s future core segments and the direct majority of investments will be directed to growth areas and growth regions. The current downstream presence will be expanded by targeting formulation- and application-based segment niches as well as high-end composites, bespoke polyurethane (PU) systems, and costumer oriented and co-developed products. The existing presence in the adaptive chemical methylene diphenyl diisocyanate (MDI) and in chemical building blocks such as ethylene oxide (EO) and propylene oxide (PO) is to be further advanced in downstream urethane systems as well as downstream applications such as surfactants. The portfolio will be simplified, the companies said. Complexity will be reduced while utilizing significant strategic flexibility to consider value creating add-on acquisitions and divestments. Plastics & Coatings and Textile Effects will be managed for cash and turnaround while all other businesses will be managed for growth and margins.

The project team is progressing very well in terms of joint synergy implementation and has high confidence in meeting the synergy target in excess of USD 400 million as well as the USD 25 million tax saving target. Key regulatory filings are submitted, including in the USA, EU and China. No regulatory roadblocks are expected to closing the deal. A preliminary CFIUS filing has also been submitted.

According to the companies, the joint senior management team is committed to making HuntsmanClariant a success from day 1, combining Huntsman’s entrepreneurship and efficiency and Clariant’s innovation and business excellence. Both CEOs and executive teams are fully involved in post-merger integration planning and the great working spirit confirms the cultural fit between both organizations, the companies said.

All in all, the merger will create value for all stakeholders via a stronger balance sheet, higher cash flow, increased stakeholder returns and lower financing costs and will allocate capital for organic growth and value creating portfolio management.

Furthermore, the companies announced that the Venator standalone debt financing of USD 750 million is secured. The IPO roadshow is now underway. It will provide significant de-leveraging of HuntsmanClariant balance sheet. Clariant and Huntsman said that they will communicate regular updates on the merger preparation until closing.

We remind that, as MRC wrote before, in August 2016, Huntsman Corporation (The Woodlands, Texas) announced that it would include textile effects and the balance of its pigments and additives segment in the spinoff of its titanium dioxide (TiO2) business.

Clariant AG is a Swiss chemical company and a world leader in the production of specialty chemicals for the textile, printing, mining and metallurgical industries. It is engaged in processing crude oil products in pigments, plastics and paints. Clariant India has local masterbatch production activities at Rania, Kalol and Nandesari (Gujarat) and Vashere (Maharashtra) sites in India.

Huntsman Corporation is a publicly traded global manufacturer and marketer of differentiated chemicals with 2013 revenues of over USD11 billion. Huntsman is a global manufacturer and marketer of differentiated chemicals. The company's operating companies manufacture products for a variety of global industries, including chemicals, plastics, automotive, aviation, textiles, footwear, paints and coatings, construction, technology, agriculture, health care, detergent, personal care, furniture, appliances and packaging.
MRC

MOSCOW (MRC) -- Sonoco, one of the largest diversified global packaging companies, has announced it has signed a definitive agreement to acquire 100% of the stock of Clear Lam Packaging, Inc., a family-held developer and manufacturer of flexible and forming plastic packaging films for approximately USD170 million in cash, as per Packageprinting.

The transaction is subject to normal regulatory review and is expected to close in the third quarter of 2017.
Founded in 1969, the Elk Grove Village, Ill.-based company is projecting 2017 sales of approximately USD140 million and operates state-of-the-art manufacturing facilities in Elk Grove Village and Nanjing, China, with nearly 400 employees.

Clear Lam is a technology leader in the development, production and conversion of high barrier flexible and forming films used to package a variety of products for consumer packaged goods companies, retailers and other industrial manufacturers, with a focus on structures used for perishable foods. Clear Lam serves markets including condiments, dairy, meats and cheese, produce, confection, fresh and prepared foods, nuts and snacks, food service and personal care.

According to Jack Sanders, Sonoco president and CEO, the acquisition of Clear Lam will further build on Sonoco’s strategy of expanding its global flexible packaging and thermoforming plastics operations to provide offerings serving the fast-growing perimeter of grocery and retail food stores.

"The addition of Clear Lam will significantly expand our flexible packaging and thermoforming plastics operations as we will be able to develop, produce and convert high barrier flexible and forming film structures to package fresh and prepared food products purchased in the growing store perimeter," said Sanders. "As an example, Clear Lam complements our recent acquisition of Peninsula Packaging’s thermoforming operations by being able to produce barrier flexible film lidding that extends shelf life, is resealable and provides a complete packaging solution to our fresh fruit and vegetable customers."

Concerning the acquisition, Clear Lam Packaging President James Sanfilippo said, "We are excited to become part of the Sonoco family. I see the two companies with similar cultures, focused on building strong relationships with employees, customers and suppliers. Innovation has always been a driving force within Clear Lam and Sonoco, and it will continue to be a foundation for further growth."

Sonoco Executive VP and COO Rob Tiede said the addition of Clear Lam provides significant technology advantages as well as being able to drive synergies through the internalization of materials for Sonoco’s existing flexible and thermoforming customers.

"What attracted us to Clear Lam was its reputation for driving high-barrier film packaging innovations to meet changing consumer needs. We’re especially interested in opportunities to leverage their expertise in modified atmosphere packaging, which comes from a strong base of material science knowledge when it comes to films, additives and adhesives," said Tiede. "Additionally, in recent years, Clear Lam has developed new portion control condiment packaging, peel-reseal films for fresh fruits and vegetables, forming films for healthy yogurts, lidding films for fresh guacamole, special drinking pouch films and several new packaging films that expand shelf life."
MRC

MOSCOW (MRC) -- Polytek Development Corp., a manufacturer of specialty polymers including polyurethane elastomers and casting resins, silicones, epoxies, and latex, has announced today the acquisition of Raw Material Suppliers, a distributor of private-labeled RTV silicone, urethane, mold release, and adhesive products, said Polytek.

The acquisition was assisted by MPE Partners and will further enhance their investment portfolio. Steve Levine, Founder of Raw Material Suppliers added, "We are excited to partner with Polytek, which will supplement our existing offerings and allow us to better service our valued customers." Moving forward, Levine will serve as a senior sales executive with the combined entity.

Jonathan Kane, CEO of Polytek commented, "The acquisition of Raw Material Suppliers further enhances our product offerings, deepens our technical expertise and solidifies our ability to serve customers on the west coast."

Started in 1984 and headquartered in Easton, PA, Polytek® Development Corp. is a leading manufacturer of specialty polymers including: polyurethane elastomers and casting resins, silicones, epoxies, and latex. These systems are used primarily in mold making and casting applications in industrial, construction, entertainment, fine arts and technology sectors.

Headquartered in San Marcos, California, Raw Material Suppliers is a distributor of private-labeled RTV silicone, urethane, mold release, and adhesive products.
MRC