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Chemical Finance Digest, Oct. 3-7
3:42 PM MDT | October 11, 2011 | By VINCENT VALK
Topping the headlines last week, Dow Chemical affirmed that it is on track to meet its’ previously announced financial goals, including $10 billion in Ebitda in the near-term, at the company’s investor day in New York City. Dow expects to be able to generate $8 billion in Ebitda even in a worst-case economic scenario.
In M&A news, PolyOne says it will acquire colorants maker ColorMatrix for $486 million, in an effort to derive more revenue from specialties. Meanwhile Solutia announced plans to acquire Southwall Technologies, a maker of energy efficient films, for $113 million. The deal secures Solutia’s access to Southwall’s proprietary technology. Outside those deals, BASF says it will sell its European decorative paints unit, which recorded $107 million in sales last year, and BP will sell its 36.9% stake in the Atlas Methanol joint venture with Methanex.
Some earnings came in last week. Monsanto reported a narrowed loss for its seasonally weak fourth-quarter, at $112 million, or 21 cts/share, beating estimates. RPM’s earnings rose 11%, to $76.8 million, or 59 cts/share.
No new debt was issued last week, though Moody’s did reaffirm PolyOne’s ‘Ba2’ credit rating after the ColorMatrix acquisition. The deal will be funded with cash on hand and $300 million in new long-term debt.
In macroeconomic news, September’s U.S. unemployment report was better than expected. The economy added 103,000 jobs, or 58,000 after adjusting for the impact of Verizon workers who returned from a strike, and job growth for July and August was revised upwards. Still, “we are far from out of the woods,” says IHS Global Insight economist Nigel Gault. “The report is a relief after recent market turmoil, but doesn't remove fears for the future,” he says.