Chemical Industry Giving Rise to "a Merger Tide"!

      On August 20, 2021, Zhejiang Communications Technology Co., Ltd. announced that in order to deepen the reform of state-owned enterprises and concentrate on refining, strengthening and expanding the main business, the company and Sinopec Ningbo Zhenhai Refining & Chemical Co., Ltd. (referred to as "Zhenhai Refining & Chemical") signed the Intention Agreement on Equity Transfer of Ningbo Zhetie Jiangning Chemical Co., Ltd. and Ningbo Zhetie Daphoon Chemical Co., Ltd.

      The target companies transferred by this agreement are all wholly-owned subsidiaries of listed companies. Among them, Ningbo Zhetie Jiangning Chemical Co., Ltd. mainly produces maleic anhydride with an annual output of 100,000 tons and methanol solution of sodium methylate with an annual output of 50,000 tons. By the end of 2020, Jiangning Company had total assets of 1.356 billion yuan and net assets of 476 million yuan. In 2020, it achieved an operating income of 960 million yuan and a net profit of 22 million yuan.

      Zhejiang Communications Technology Co., Ltd. said that due to the strong periodicity of chemical business, large fluctuations in performance, and the lack of industrial chain advantages of company's chemical business. Through this equity transfer, the company plans to withdraw from the chemical industry, focus on the development of infrastructure construction, and improve the core competitiveness by optimizing the industrial structure and safeguarding the interests of all shareholders. In addition, the current transaction document has not been formally signed, which is only the preliminary intention reached by both parties. There are still uncertainties in the transaction matters, and it is impossible to predict the impact on the company's business performance in the current year.

      Before the signing of this agreement, the trademark rights and patents registered in the name of the target company and all the declared patents and formulas (including but not limited to PC modification technologies and formulas) of the target company shall continue to be owned by the target company. After the delivery of the target equity, Party A will grant the trademark Jiangshan Chemical to the target company for continued use free of charge within the validity period.

      Zhenhai Refining & Chemical was established in June 2018 with a registered capital of 5.4 billion yuan. Its business scope includes the processing of crude oil, the production and storage of petroleum products (except hazardous chemicals) and other petroleum products and chemical products (except hazardous chemicals).

Indorama Acquired Oxiteno

       On August 16, Thailand's chemical giant Indorama Ventures agreed to acquire surfactant manufacturer Oxiteno from Brazilian Ultra Group for US $1.3 billion, and the transaction is expected to be completed in the first quarter of 2022.

      Indorama said that the acquisition would enable it to have a "unique investment portfolio" of high-value surfactants and significantly expand the company's newly created integrated business of oxides and derivatives (IOD). The downstream product portfolio of IOD includes surfactant, propylene oxide, propylene glycol and ethylene oxide.

      Oxiteno is a surfactant manufacturer focusing on Latin America, with production plants in Brazil, Mexico, Uruguay, Venezuela and the United States.

      In 2019, Indorama acquired Huntsman's chemical intermediates and surfactants business for US $2 billion. According to Indorama, Oxiteno together with the assets acquired from Huntsman, and the traditional polyethylene terephthalate (PET) commodity business of Indorama, constituted the main profit growth point of IOD business section.

LANXESS Acquired Emerald Kalama Chemical

      In early August, LANXESS, a specialty chemicals company, completed the acquisition of Emerald Kalama Chemical. This American-based company is the world's leading manufacturer of specialty chemicals. LANXESS signed the purchase agreement on February 14, 2021, and has received all necessary regulatory approvals. LANXESS provided funds for the purchase price of about 1.04 billion US dollars (6.72 billion yuan) from the working capital.

      In 2020, the global sales of Emerald Karama Chemical were about 425 million US dollars (375 million Euros), and the EBITDA pre-exception was about 90 million US dollars (80 million Euros). 75% of the sales came from the special products business in the consumer care market, especially the flavors and fragrances, and preservatives used in food, household products and cosmetics. One quarter of the sales came from the specialty chemicals business for industrial applications. After the completion of the transaction, the number of employees of LANXESS increased by about 470, and increased in three production bases: Kalama/Washington (USA), Rotterdam (Netherlands) and Wideness (UK).

      The acquisition strengthens the product portfolio of plastics, paints and coatings and adhesives.

DuPont acquired Laird Performance Materials

      On July 1, DuPont announced that it had successfully completed the acquisition of Laird Performance Materials for US $2.3 billion (about RMB 14.9 billion).

      Laird Performance Materials has become a part of the electronic interconnection technology business of Electronics and Industry Division. This acquisition will strengthen DuPont's leading position in the fast-growing advanced electronic application field, and support key industry trends such as high-performance computing, artificial intelligence, 5G communication, intelligent/self-driving cars and Internet of Things.

      As previously announced, Laird Performance Materials had a revenue of 465 million US dollars in 2020 and a global workforce of about 4,300, which will be integrated into the Interconnect Solutions business of DuPont Electronics and Industry Department. The electromagnetic shielding and thermal management products of Laird Performance Materials complement each other with the product portfolio of electronic interconnection technology in soft board materials, dry films, special films and electroplating chemicals.

      Jon Kemp, President of DuPont Electronics and Industry Department, said that by combining applied materials science expertise with applied engineering capabilities, this acquisition made DuPont an important partner of major electronic original equipment manufacturers (OEM), and the combined organization would jointly enhance their leading position in accelerating the adoption of high-performance computing, artificial intelligence, 5G communication, intelligent/self-driving cars and Internet of Things. At the same time, it expanded DuPont's product and solution portfolio in the whole electronic value chain, and established the company's expertise in key technologies, which was crucial for realizing the next generation of electronic equipment and infrastructure.

DIC Acquired BASF's Global Pigment Business

      On June 30th, DIC Corporation announced that it had completed the acquisition of related assets and shares of BASF Colors and Effects, the pigment business of Germany's BASF, the world's largest chemical manufacturer, at a price of 1.15 billion Euros (about 8.8 billion yuan).

      Through this acquisition, the product portfolio of both parties would be supplemented, and they would further expand the product lineup for displays, cosmetics, coatings, plastics, inks and special applications, and strengthen their position as the world's leading pigment manufacturer. At the same time, they would establish a new system to provide customers with richer products and solutions on a global scale, and accelerate the qualitative transformation of DIC Group's pigment business.

      After the acquisition, DIC and BASF Color and Effects Company have more than 30 pigment production facilities around the world, and the company's pigment portfolio will provide a wider range of product categories, involving effect pigments, inorganic pigments, organic pigments, special dyes and pigment preparations.

Celanese Acquired ExxonMobil Elastomer Business

      Celanese, the world's leading manufacturer of high-performance engineering plastics, announced the signing of a final agreement to acquire Santoprene‚Äö√묢TPV elastomer business of ExxonMobil. According to the agreement, Celanese will acquire the famous Santoprene‚Äö√묢 brand as part of its extensive TPV product portfolio, including related intellectual property rights, production and commercial assets and a world-class team.

      "This transaction has greatly strengthened our existing elastomer product portfolio, enabling us to introduce a wider range of functional solutions into future growth areas such as travel solutions, medical care and sustainability." Tom Kelly, senior vice president of engineering materials, said, "The reputation of Santoprene‚Äö√묢 brand in the TPV field matches the flagship brands of Celanese engineering materials, including Celanese Hostaform¬¨√Ü Polyformaldehyde (POM) and GUR¬¨√Ü UHMW-PE. As the product becomes part of the engineering materials portfolio and project alternative library, we are confident that our joint commercial and technical teams around the world will produce significant shareholder value. "

      ExxonMobil's Santoprene‚Äö√묢 business is the world's leading producer of TPV, serving various end uses, including automobiless, construction, home appliances, medical care and industry. TPV is a chemically cross-linked high-performance material with a unique combination of engineering thermoplastic and elastomer characteristics. Santoprene‚Äö√묢's product portfolio is highly functional for specific application requirements and has industry-leading intellectual property rights.

      According to the terms of the final agreement, Celanese will acquire ExxonMobil's Santoprene‚Äö√묢 business at a total price of US $1.15 billion (about RMB 7.4 billion) on the basis of no cash and no debt.

Arkema Planned to Acquire Agiplast

      Arkema planned to acquire Agiplast, a high-performance polymer renewable resource company. The company is a long-term partner of Arkema's machinery recycling business.

      Agiplast has a factory in Italy with 32 employees and annual sales of about 15 million Euros. The acquisition was expected to be completed in June, which would enable Arkema to improve the quality of recycled polymer to customers. In October 2019, Arkema launched Virtucycle, an ambitious project in cooperation with Agiplast, aiming at developing the collection and regeneration cycle of high-performance polymers while reducing carbon dioxide emissions.

      Through this acquisition, Arkema would become the first fully integrated high-performance polymer manufacturer to provide bio-based and recyclable materials. The acquisition conformed to Arkema's corporate social responsibility and sustainable strategy, especially the transition to circular economy.

American Prince Acquired Ferro Group

      On May 11th, Prince International of the United States announced that it would acquire Ferro Group for $22 per share in cash, with a transaction value of about $2.1 billion (about RMB 13.55 billion).

      Prince said that after the completion of the acquisition, Ferro would merge with Chromaflo Technologies, a colorant technology solution provider. The merger would bring diversified businesses around the world, with sales of about $2 billion. According to the terms of the transaction, Prince would acquire all issued common shares of Ferro in cash of US$ 22 per share. The purchase price is 25.1% higher than the closing price of $17.58 per share on May 10th. The transaction is expected to be completed in the first quarter of 2022, subject to the consent of Ferro shareholders and the approval of relevant regulatory authorities.

      Prince is a manufacturer of specialty chemicals, minerals and industrial additives, employing about 1,200 employees in 21 factories on six continents.

      Ferro Group is a supplier of technical functional coatings and color solutions. It provides functional coatings for glass, metal, ceramics and other substrates in the form of special pigments and colorants, and is widely used in industrial and application fields. It has about 3,700 employees worldwide and its sales in 2020 were 959 million US dollars.

Trinseo Acquired Arkema PMMA Business

      On May 3, Trinseo announced that it had officially completed all the procedures for acquiring the PMMA business of Arkema. The acquisition is the catalyst for the transformation of Trinseo. In December 2020, Trinseo announced that it would acquire PMMA business of Acoma for RMB 1.137 billion. This reform transaction, which lasted for half a year, will accelerate the growth of Trinseo's global engineering materials business and bring about an annual synergy effect of USD 50 million.

      PMMA is a transparent and rigid resin, which is widely used. Arkema's PMMA business is a comprehensive business, including the production of methyl methacrylate (MMA) to polymethyl methacrylate (PMMA), and the sale of PMMA in America under the famous brand Plexiglas and Altuglas in other parts of the world. In addition, this acquisition is also a new step in Arkema's transformation, realizing the grand goal of becoming a pure special material manufacturer by 2024.

      As a global supplier of materials solutions and a manufacturer of plastics, latex adhesives and synthetic rubber, Trinseo has sales of 3 billion US dollars in 2020, and has 17 production bases and about 2,600 employees worldwide. Arkema's PMMA business will improve Trinseo's high-performance plastic product portfolio (ABS, PC, etc.) and enhance its position in the automotive, construction and lighting markets, medical and consumer electronics. Therefore, these highly complementary business portfolioses will provide new opportunities for growth and development.

      In this acquisition, Trinseo added seven PMMA and MMA manufacturing plants and three R&D centers in Europe and North America. In terms of employees, Trinseo has added about 860 employees in its business department, including those from France, Denmark, Italy, the United States and Mexico, as well as other sales and marketing team members from all over the world.

Standard Industry Holdings Acquired Grace

      On April 16, W. R. Grac, an American specialty chemical and materials company, and Standard Industries Holdings Inc jointly announced that they had reached a final agreement, and Standard Industries Holdings would acquire Grace in an all-cash transaction, with a value of about 7 billion US dollars (about 45.4 billion yuan), including Grace's upcoming fine chemicals acquisition transaction.

      According to the terms of the agreement, Standard Industrial Holdings will acquire all the outstanding shares of Grace common stock in cash of US$ 70 per share. The purchase price is about 59% higher than the closing price of $44.05 on November 6, 2020.

      Both parties expect the transaction to be completed in the fourth quarter of 2021. After the transaction is completed, Grace will become a private company and Grace's common stock will no longer be listed on the New York Stock Exchange.

      Grace has more than 3900 employees, serving customers in 70 countries around the world, including through catalyst technology and materials technology. Grace catalyst technology department develops and produces catalysts used in oil refining, petrochemical and other chemical fields; Grace Materials Technology Department focuses on special silica gel, which is widely used in coatings, consumer goods, industry and pharmaceutical fields.

Covestro Acquired DSM Resin and Functional Materials Business

      On April 1, Covestro successfully completed the acquisition of resin and functional materials business of Netherlands Royal DSM Group (hereinafter referred to as "RFM"). According to reports, Covestro and DSM signed the acquisition agreement at the end of September last year, and the equity value of RFM was 1.6 billion euros (about 12.772 billion yuan).

      The transaction will include all DSM resin and functional materials businesses, including DSM Niaga¬¨√Ü, additive manufacturing and Advanced Solar coatings business. These businesses accounted for 1.012 billion euros of annual net sales of DSM in 2019 and 133 million euros of EBITDA in 2019. The integration of RFM will build a business field with larger scale and stronger technical capability, and benefit existing and future customers and employees through this stronger growth platform.

       This acquisition has diversified the business scope of Covestro, and at the same time significantly enhanced the company's position in the attractive high-growth market.

      Through this acquisition, Covestro will expand its business in some areas. Covestro is one of the leading manufacturers of waterborne polyurethane dispersions. Through the acquisition of RFM, Covestro will increase a full range of waterborne polyacrylate resin business, strong brands in sustainable development fields such as Niaga¬¨√Ü, a series of additive manufacturing solutions, and advanced solar anti-reflection coating business. In addition, Covestro will further enrich its technology portfolio, including a variety of water-based technologies, powder coating resins and radiation-curable resin technologies.