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Kraton rethinks merger with LCY Chemical’s SBC business

9:26 AM MDT | July 7, 2014 | —Deepti Ramesh

Kraton Performance Polymers notified LCY Chemical (Taipei) on 30 June that Kraton’s board of directors intends to withdraw its recommendation that Kraton stockholders approve the previously announced merger with LCY’s styrenic block copolymer (SBC) operations. The Kraton board cites declines in the operating results of LCY’s SBC business in the first quarter of 2014 and in its results outlook together with a related decline in Kraton’s stock price and negative reactions from stockholders following Kraton’s announcement on 24 June...

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Comments (1) for Kraton rethinks merger with LCY Chemical’s SBC business
Dear Deepti,

thanks for your interesting research.

I can t see Kratons`s motivation:
LCY is not integrated and have no strategic access to BD.
Their postion in HSBC is weak.
Their company culture is commodity orientated.

On the other hand Kraton has a running JV with Formosa and thus will have it`s base for HSBC in Asia including access to BD.
Is it really so attractive to compete in China against stateowned Sinopec for infrastructure projects?

I think Kraton`s objective must be to be the leader in HSBC but
not to be among the big SBC mass producer.

Sincerely yours

Posted by justyne Erman on Thursday, July 17, 2014 @ 02:30 PM

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