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Chemical Finance Digest, July 18-22
10:55 AM MDT | July 26, 2011 | By VINCENT VALK
Topping the week's headlines, Ecolab has agreed to acquire Nalco for $8.1 billion. Nalco shareholders will receive 70% of their consideration in Ecolab shares and 30% in cash, according to the deal's terms.
Second-quarter earnings came in strong, mostly. PPG, Air Products and Celanese each recorded double-digit gains, and PPG and Celanese beat analysts' estimates. Sabic's net income rose a staggering 61% on increased volumes and prices. However, AkzoNobel's Ebitda fell 10% as high raw material costs took their toll.
In other M&A news, Lonza's proposed takeover of Arch came about after Arch engaged Lonza about acquiring the latter's biocides business.
In macroeconomic news, talks on raising the U.S. debt limit fell apart, inching the world's largest economy closer to a default, or at least a downgrade. IHS Global Insight argues that a downgrade is the more likely outcome, and that it's possible even if leaders reach a deal. Preisdent Obama and House Speaker John Boehner both addressed the nation last night, with conflicting messages. In the Washington Post, one commentator notes that while the President is addressing the political middle, the Speaker is addressing the right.
The week ahead will see U.S. second-quarter GDP figures released on Friday. Consensus is for 1.9% growth, a tepid figure that matches the first-quarter. Of course, if no deal is reached on the debt limit by then, markets could be preoccupied by the prospect of U.S. default.