Chemical Finance Digest, Aug. 22-26

Topping the headlines last week, Cabot announced plans to sell its Supermetals business, which makes tantalum and alloys, to Global Advanced Metals, a tantalum ore supplier, for $400 million. The business posted $177 million in sales in 2010, and the deal is expected to close by the end of the year.

 

In other M&A news, Reliance Industries has named Navin Wadhwani, a managing director at investment bank NM Rothschild & Sons, head of the company's newly-created M&A division. Meanwhile, the European Commission has approved Berkshire Hathaway's takeover of Lubrizol. Ashland also completed its purchase of ISP, while the credit rating agencies had a difference of opinion on the deal's impact on Ashland's balance sheet.

 

In equity news, Westlake is planning to buy back $100 million in shares and raise its quarterly dividend by 16%. Ecolab is also planning a share repurchase, contingent on the completion of the Nalco acquisition. Genomatica, a sustainable chemicals maker, has filed for a $100 million IPO. Separately, Nasdaq has issued a delinquency notice to Keyuan Petrochemicals for the company's failure to file quarterly reports with U.S. regulatory authorities.

 

In other headlines, Tessenderlo swung to a loss due to a one-time charge related to the divestiture of its chlor-alkali and PVC business.

 

In macroeconomic news, second-quarter U.S. GDP growth was revised downwards to 1% from 1.3%. This is, needless to say, bad news. "The outlook remains very weak. Our August forecast of 1.2% growth in the third quarter and 1.5% in the fourth is beginning to look optimistic. We continue to place recession risks at a high 40%," says IHS Global Insight chief economist Nigel Gault.

 

The week ahead will see August employment figures for the U.S. released on Friday. Consensus is for a gain of 67,000 jobs, after a 117,000-job gain in July.

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