Dow, Sherwin-Williams, BP, KCC chemical giants collectively 'sell factories'!

Recently, the acquisition battle between PPG and Finnish Tikkurila Coatings, which lasted for six months, has finally come to an end. PPG supplemented the tender offer document dated January 14, 2021, which involves a voluntary proposed public cash tender offer for all shares in Tikkurila. According to the revised quotation, Tikkurila shareholders will receive 34.00 euros in cash for each Tikkurila stock held by Tikkurila shareholders, with a total transaction value of approximately 1.52 billion euros (approximately RMB 11.8 billion), including debt and cash. So far, Tikkurila’s largest shareholder, Oras Invest Oy, holds approximately 20.01% of Tikkurila’s shares. After receiving the necessary regulatory approvals, it has unconditionally agreed to sell all its shares in Tikkurila to PPG at an issue price of 34.00 euros per share. And make an unconditional and irrevocable commitment to support the bid quotation.

Trading in the chemical industry is not uncommon, and there are also many chemical companies that sell businesses, departments, or factories for various reasons. According to the Coatings Purchasing Network, in just over two months from 2021 to the present, many domestic and foreign chemical companies have announced their own "spin-offs."

On March 2, Zebra-chem Co., Ltd., known for the development of peroxide masterbatch and blowing agent masterbatch, sold it to Milliken.

In March, Exxon Mobil sold most of its upstream assets in the central and northern North Sea of the United Kingdom to HitecVision for more than US$1 billion (about 6.5 billion yuan). The sale includes ExxonMobil's interest in 14 oil fields in the North Sea, UK.

On February 19, Bharat Petroleum Corporation (BPCL) sold its 61.65% stake in the Numaligarh refinery to Engineering Corporation of India (EIL).

On February 19, ENN Natural Gas Co., Ltd. intends to sell its shareholding company, Xinneng Phoenix (Tengzhou) Energy Co., Ltd., which is 40% of the latter's equity.

On February 18, Sherwin-Williams sold Wattyl, a leading paint manufacturer in the decorative and protective fields in Australia and New Zealand, to Haihong Senior, which is expected to be completed in the first quarter of 2021.

On February 18, Royal Shell sold its shale business in Western Canada to Crescent Point Energy for about 900 million Canadian dollars (about 4.6 billion yuan).

On February 14, Emerald Kalama Chemical, the world's leading manufacturer of specialty chemicals, sold all its shares to LANXESS, which is expected to be completed in the second half of 2021.

On February 1, British Petroleum (BP) will sell a 20% interest in Block 61 in Oman to Thailand’s PTT Exploration and Production Company for US$2.6 billion (approximately RMB 16.9 billion).

In February, the coating company Ennis-Flint sold to PPG for US$1.15 billion (approximately RMB 7.5 billion).

In February, Dow Chemical proposed to sell its infrastructure assets in Germany, which has now been included in a potential transaction worth 800 million euros (about 6.2 billion yuan).

On January 29, Invista sold its aromatic polyester polyol business and related assets to Stepan. The transaction included two production bases located in Wilmington and North Carolina, USA. Vlissingen, the Netherlands, and related intellectual property rights, customer relations, inventory and working capital.

On January 27, the French company INTACE SAS, a manufacturer of special fungicides in the packaging industry, sold to LANXESS. The transaction is expected to be completed in the first quarter of 2021.

On January 21, North American specialty chemicals producer Gabriel Performance Products sold to Huntsman for US$250 million (about 1.6 billion yuan).

On January 11, the renewable gas company Fonroche Biogaz was sold to the oil and gas giant Total Group.

On January 11, global industrial and automotive coatings manufacturer Worwag (Worwag) sold to PPG, the transaction is expected to be completed in the first half of 2021.

On January 6, the US hydrogen energy industry giant Plug Power sold 9.9% of its shares to SK Holdings and SK E&S, a subsidiary of SK Group, for 1.6 trillion won (approximately RMB 9.2 billion).

On January 6, KCC Group, a leader in the field of chemical materials production in Korea, sold its organic silicon business in Korea and the UK and its organic silicon sales business in China to Momentive Advanced Materials.

On January 5, Eurostar Engineering Plastics, a French engineering plastics manufacturer, sold it to Ascend, the world’s largest integrated PA66 resin product manufacturer.

On January 5, Solvay sold its amphoteric surfactant manufacturing business to OpenGate Capital, a global private equity company.

On January 5, VersaFlex, a manufacturer specializing in polyurea, epoxy and polyurethane coatings for infrastructure and industrial applications, sold to PPG.

In January January, BP sold its global aromatics and acetyl business to Ineos at a price of US$5 billion (approximately RMB 32.5 billion), including 15 factories worldwide (5 in the Americas, 2 in Europe and 8 in Asia) and 10 Joint ventures.

According to incomplete statistics from the Coatings Purchasing Network, more than 20 chemical industry companies have sold their business segments, equity interests, or directly sold their companies to other companies at a higher price. Among them are chemical companies such as Exxon Mobil, Sherwin-Williams, Shell, BP, Dow, KCC, Solvay, etc., with sales of more than 100 billion yuan. The announcements of some companies indicate that the divestment of businesses related to the main business is mainly to focus on the main business and deepen the field layout. However, in order to transform and upgrade, they are forced to "break their arms to survive" to withdraw funds back and forth. In any case, in the midst of the epidemic, timely adjustments to business sectors and optimization are what chemical companies should start planning as soon as possible.