AkzoNobel in talks to buy US rival Axalta

MOSCOW (MRC) -- Dutch paints and coatings maker AkzoNobel, under pressure after rejecting a lucrative takeover offer and then issuing two profit warnings, said it was in talks to buy US rival Axalta Coating Systems Ltd that could create a USD30 billion company, reported Reuters.

Akzo, the maker of Dulux paint, announced it was in "constructive talks" following market speculation about a possible deal.

Reuters reported on Friday the companies were in talks, sending Axalta’s shares 17% higher.

Akzo has a market capitalization of EUR19.5 billion (USD22.7 billion), while Axalta is worth USD8.1 billion at Friday’s closing price of USD33.15.

Akzo said merging with Axalta, whose truck coatings business fills a hole in its portfolio, would "create a leading global paints and coatings company."

Akzo earlier this year faced lawsuits from shareholders angry over its decision to reject a 26 billion euro takeover offer from US rival PPG Industries.

Analyst Joost van Beek of Theodoor Gilissen said the timing of the Axalta deal will be difficult, and Akzo’s management is under pressure to pull it off.

"There is a large risk that Akzo will pay too much, as it is clear that they want to stay out of the hands of PPG, and Axalta knows that."

Sources familiar with the matter told Reuters on Friday that talks were at an early stage and there was no guarantee the companies would come to an agreement.

As MRC informed previously, in December 2016, AkzoNobel finalized the acquisition of BASF’s global Industrial Coatings business, which supplies a range of products for industries including construction, domestic appliances, wind energy and commercial transport, strengthening its position as the global number one supplier in coil coatings.

Akzo Nobel N.V., trading as AkzoNobel, is a Dutch multinational, active in the fields of decorative paints, performance coatings and specialty chemicals. Headquartered in Amsterdam, the company has activities in more than 80 countries, and employs approximately 55,000 people.
MRC

MOSCOW (MRC) -- BP Midstream Partners' has announced that its initial public offering was priced at USD18 per unit, below the expected range of USD19 to USD21, raising about USD765 MM, reported Reuters.

The unit of British energy company BP Plc, which sold 42.5 MM units, is scheduled to debut on the New York Stock Exchange under the symbol "BPMP" on Thursday, it said in a statement.

The offering values BP Midstream at about USD1.9 B.

The master limited partnership (MLP) was formed by London-based BP's US pipeline unit to transport crude oil, refined products and diluents to customers under long-term agreements.

An MLP structure is often used by pipeline and other capital-intensive companies to distribute excess cash to investors in the form of tax-deferred dividends.

BP Midstream, which operates in the US Midwest and the Gulf of Mexico, posted net income of USD63 MM for the 6 mos ended June 30, on a pro forma basis, the company said in a filling.

Citigroup, Goldman Sachs, Morgan Stanley, Barclays are among the top underwriters of the IPO.

We remind that, as MRC wrote before, in Q1 2016, BP PLC sold its petrochemical complex in Decatur, Alabama, to Indorama Ventures Public Co. Ltd. (IVL.TH), for an undisclosed sum, as part BP's plan to restructure its global petrochemicals business. The divestment is in line with BP’s global petrochemicals strategy of pursuing a competitively advantaged portfolio through world-scale, low-cost facilities that utilize BP proprietary technology, including the production of purified terephthalic acid, or PTA, a key raw material in the production of polyester.

BP is a leading producer of oil and gas and produces enough energy annually to light nearly the entire country for a year. Employing about 17,000 people across the country, BP supports more than 170,000 additional jobs through all of its business activities.
MRC

MOSCOW (MRC) — ExxonMobil Corp and Chevron Corp said on Friday their quarterly profits each jumped about 50%, helped by rising commodity prices and lower costs, as per Hydrocarbonprocessing.

The results show improving cash generation at both companies and in the industry in general, as investors continued to push for capital discipline throughout the energy sector. "Cash is king, more and more," said Brian Youngberg, an oil industry analyst with Edward Jones. "These companies are trying to be disciplined and show growth."

At both companies, though, the results also reflected their dependence on commodity price swings to boost results. Neither company hedges oil or natural gas production. At Exxon, results beat expectations despite a drag from Hurricane Harvey, which shuttered many US Gulf Coast refineries during August.

Exxon's shares fell 1.7% to USD82.12 in morning trading. At Chevron, a writedown of its Bangladesh operations and a drop in US production weighed on results, which missed Wall Street expectations by a wide margin.

Chevron's shares dropped 3.5% to USD114.30 in morning trading. French rival Total SA posted a 29% jump in third-quarter net profit as project ramp-ups and new investments lifted production.
MRC

MOSCOW (MRC) — Independent US refiner Phillips 66 on Friday posted a quarterly profit that handily beat analysts’ estimates, boosted by soaring refining margins in the aftermath of Hurricane Harvey, said Hydrocarbonprocesing.

Hurricanes have battered the Texas region since late August, sapping demand for crude oil and destroying gasoline lines in various parts of the US Southeast and Midwest.

Phillips 66’s third-quarter refining margins climbed 24% to USD10.49 per barrel on higher distillate and gasoline margins.

The strong margins mirrored those posted by smaller rivals Marathon Petroleum Corp and Valero Energy Corp on Thursday.

Houston-based Phillips 66’s consolidated earnings rose to USD823 MM, following higher sales in its refining, chemicals and midstream businesses.

Adjusted earnings rose to USD858 MM, or USD1.66 per share, in the third quarter ended Sept. 30, from USD556 MM, or USD1.05 per share, a year earlier.

Analysts’ had expected the company to earn USD1.57 per share, according to Thomson Reuters I/B/E/S. Phillips 66 cut its 2017 capital budget by USD700 MM to USD2 B after delaying its final investment in a project. The company’s shares were little changed in premarket trading.
MRC

MOSCOW (MRC) — Russian pipeline monopoly Transneft is buying a stake in the oil terminal at the Baltic Sea port of Ust-Luga from businessman Andrei Bokarev, two sources familiar with the matter told Reuters on Friday.

Transneft-Baltica's request to buy a 25% plus one share stake in terminal was approved by the Federal Antimonopoly service last week. The terminal, launched in 2015, has a capacity of 30 MMt of oil products per year.

Bokarev owns 74% and oil trader Gunvor holds the remainder. Transneft confirmed that it was buying the stake in the terminal but did not disclose the seller or price.

Bokarev was not available for immediate comment. Gunvor told Reuters that it was not selling its stake.

Gunvor built the terminal and sold a 74 percent stake in the terminal to Bokarev in 2015. Analysts at the time estimated the value of Gunvor's deal with Bokarev at USD1.9 B–USD2.2 B at current exchange rates.
MRC