Year in review: Deals, US crackers are top stories in 2012
10:20 AM MST | January 4, 2013 | By LINDSAY FROST
A handful of acquisitions in the $5-billion range and the continuing announcements of planned US ethylene crackers were the highlights of CW’s coverage in 2012 (as well as CW’s most-read stories online). Industry responses to weakness in Europe, including cuts from Dow Chemical, DuPont, and BASF, were also notable stories in 2012, as were two separate explosions that threatened the supply chains for nylon-12 and superabsorbent polymers.
1. Eastman to acquire Solutia for
$4.7 billion, (CW, February 6–13)
Eastman Chemical agreed to acquire Solutia for $4.7 billion in cash and stock in early January in one of industry’s largest deals in 2012. The addition of Solutia lifts Eastman near $10 billion in annual revenue and enhances its position in specialty chemicals and in Asia.
2. DuPont sells auto coatings to Carlyle for $5.15 billion (CW, September 3)
Private equity firm The Carlyle Group (Washington) agreed to purchase DuPont’s performance coatings unit, a leading supplier of automotive and industrial coatings, for $4.9 billion in cash. The deal was one of the largest announced by private equity in 2012 and continues DuPont’s shift toward higher-margin and higher-growth businesses in agriculture, alternative energy, and advanced materials.
3. Dow, DuPont announce cuts as
weakness persists (CW, October 29)
Dow Chemical and DuPont announced separate plans to deepen restructuring efforts in October. Dow announced plans to eliminate approximately 2,400 positions, or 5% of its global workforce, citing “persistently slow macroeconomic growth.” DuPont will cut 1,500 positions globally, roughly 2% of its workforce, over the next 12–18 months. “Continuing macroeconomic uncertainty and resulting slowing demand in certain sectors are reminders of why agility and productivity must be a way of life,” says DuPont chair and CEO Ellen Kullman. Several companies announced or readied resturcturing programs as conditions deteriorated in 2012, particularly in Europe.
4. ExxonMobil Chemical Files Permits for Cracker in Texas (CW, June 18)
ExxonMobil Chemical signaled its confidence in the natural gas–driven revitalization of the US chemical industry. The company filed permits with EPA and the Texas Commission for Environmental Quality for a multibillion-dollar project that includes building an ethane cracker at Baytown, TX; and two high-performance polyethylene (PE) lines at the company’s nearby Mont Belvieu, TX, plastics plant.
5. Sasol advances cracker and GTL in Louisiana
(CW, December 10–17)
Sasol said in October that it will proceed with the front-end engineering and design of its previously announced integrated gas-to-liquids (GTL) and ethane cracker at Lake Charles, LA. Total investment in both projects is estimated around $16–21 billion.
6. OxyChem, Mexichem eye Texas cracker
(CW, August 31)
Vinyls maker Mexichem (Tlalnepantla, Mexico) says is has signed a memorandum of understanding with Occidental Chemical (OxyChem) to evaluate the formation of a joint venture for the construction of an ethane-based cracker to produce about 500,000 m.t./year of ethylene. Projects for Chevron Phillips Chemicals, Dow Chemical, Formosa, and Shell Chemical— announced in 2011—are the other planned US ethylene projects.
7. PPG to merge commodity chemicals with Georgia Gulf (CW, July 23)
PPG Industries has agreed to merge its commodity chemicals business with Georgia Gulf in a deal valued at $2.1 billion. The deal calls for PPG’s commodity business to be distributed to PPG shareholders through a tax-free spin-off. The separated business would then immediately merge with Georgia Gulf. Westlake Chemical had announced an unsolicited takeover bid for Georgia Gulf but eventually dropped that bid after Georgia Gulf management rejected the company’s offers.
8. Explosion at Nippon Shokubai fuels fears of SAP shortages (CW, October 1–8)
An explosion and a fire at Nippon Shokubai’s superabsorbent polymers (SAP) manufacturing facility at Himeji, Japan, near Osaka, killed a firefighter and injured 36 other people. The event gained broad coverage outside industry on fears of potential diaper shortages because of a lack of SAP supply.
9. Nylon-12 shortage impacts automotive production
(CW, April 23)
The deadly explosion and fire that struck Evonik Industries’ cyclododecatriene (CDT) plant at Marl, Germany, on 31 March raised concerns within auto supply chains. The explosion created a shortage of nylon-12, a resin essential for the manufacture of coatings and connector applications for braking systems and fuel handling in the automotive industry.
10. Linde to acquire US Lincare for $4.6 billion (CW, July 2–9)
Linde agreed to acquire Lincare Holdings (Clearwater, FL), a home health-care company, for about $4.6 billion in July. Lincare provides oxygen, respiratory and home infusion products, and related services. The company had sales of $1.84 billion in 2011. Lincare’s board unanimously approved the transaction, Linde says. Lincare was originally known as Linde Homecare Medical Systems and grew out of Linde’s business in the Americas at the beginning of the 20th century, Linde says. Linde Homecare Medical Systems became a subsidiary of Union Carbide when Carbide acquired Linde’s US business in 1917. Lincare’s current operations were carved out from Carbide in 1987.
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