Sector News

Chemtura mulls US sale as buyers show interest

June 5, 2015
Chemical Value Chain
(Bloomberg) – Chemtura Corp., a US chemical maker that emerged from bankruptcy four years ago, said it’s more likely to sell itself than make a major acquisition as it evaluates its strategic options.
 
“There is a lot of interest in the company and the portfolio,” CEO Craig Rogerson said in an interview. “The reality is you create value on a higher probability basis selling than buying right now with the multiples that are out in the market place.”
 
Chemtura is weighing a sale amid a jump in the volume of diversified-chemical deals in the US, which stands at $21.1 billion so far in 2015. That puts the industry on course for its busiest year of dealmaking since 2007, according to data compiled by Bloomberg.
 
Rogerson told investors in February that Philadelphia-based Chemtura lacks scale and is looking at options for acquisitions, a sale or merger. Its revenue has shrunk by half after selling businesses including pool chemicals and pesticides.
 
Chemtura’s four remaining businesses include petroleum additives and bromine, a mineral used in fire retardants and deepwater drilling.
 
The company may end up taking a “complex” route to selling itself with some potential buyers interested in specific assets, Rogerson said this week in Colorado Springs, where he was attending the annual meeting of the American Chemistry Council.
 
Possible Acquisition
 
For instance, a deal could be structured like Monday’s announced sale of OM Group to Apollo Group Management, in which the buyout firm will sell two OM units to Platform Specialty Products Corp. at closing.
 
Another possibility is a tax-efficient Reverse Morris Trust deal, which involves spinning off a unit that then merges with a smaller company. That’s what Dow Chemical did in March when it agreed to sell its chlorine business to Olin Corp.
 
“We are kind of ripe for that type of transaction,” Rogerson said.
 
A formal sale process may develop should Chemtura get a commitment for one part of the company and need to solicit buyers for the rest, he said. Morgan Stanley bankers led by vice chairman Susie Huang are advising Chemtura.
 
While a large acquisition remains a possibility for Chemtura, Rogerson, 58, said such a deal would need to be in an industry area similar to those it’s already involved if it’s to win support from investors. That narrows the possibilities.
 
It would be hard for Chemtura to get any bigger in bromine, urethanes or organometallics, and it would need to look downstream into customers’ markets to make an acquisition in petroleum additives, he said. An adhesives purchase is possible, he added.
 
 

comments closed

Related News

October 2, 2022

Trinseo announces potential closure of Boehlen, Germany Styrene Plant

Chemical Value Chain

Trinseo (NYSE: TSE), a specialty material solutions provider, announced it has initiated an information and consultation process with the Works Council of Trinseo Deutschland GmbH regarding the potential closure of its styrene monomer production site in Boehlen, Germany.

October 2, 2022

Celeste Mastin appointed H.B. Fuller President and CEO, succeeding Jim Owens upon his retirement

Chemical Value Chain

H.B. Fuller Company announced that Celeste Mastin, Executive Vice President and Chief Operating Officer, will succeed Jim Owens as H.B. Fuller’s President and Chief Executive Officer, effective December 4, 2022. Upon assuming the role, Mastin will also join the Company’s Board of Directors, replacing Owens, who will be retiring.

October 2, 2022

LyondellBasell realigns executive team, forms circular and low-carbon solutions business

Chemical Value Chain

New LyondellBasell CEO Peter Vanacker, who joined the company from Neste in May, today named his senior executive team and outlined organizational changes, including creation of a circular and low-carbon solutions business. All changes will be effective 1 October.