Merck KGaA to buy Sigma-Aldrich to add chemicals

MOSCOW (MRC) -- German specialty chemicals and pharmaceuticals firm Merck KGaA has entered into a definitive agreement to buy US-headquartered fine chemicals life science and technology company Sigma-Aldrich for USD17.0bn, said Bloomberg.

Merck will acquire all of the outstanding shares of Sigma-Aldrich for USD140 per share in cash. The agreed price represents a 37% premium to the latest closing price of USD102.37 and a 36% premium to the one-month average closing price.

Merck expects the transaction to be immediately accretive to its earnings per share (EPS) pre and earnings before interest, tax, depreciation and amortisation (EBITDA) margin. It also expects to achieve annual savings of approximately USD340m, which should be fully realised within three years after closing the deal. Closing is expected in mid-year 2015, subject to regulatory approvals.

The transaction has been unanimously approved by Sigma-Aldrich’s board of directors and a merger agreement will be presented to the company’s shareholders for approval. The deal has the full support of Merck’s executive board and a shareholder vote will not be required.

Rakesh Sachdev, president and CEO of Sigma-Aldrich, said: "The combined company will be well-positioned to deliver significant customer benefits, including a broader, complementary range of products and capabilities, greater investment in breakthrough innovations, enhanced customer service, and a leading e-commerce and distribution platform in the industry."

Merck plans to maintain a significant presence in St Louis, and in Billerica, the US, following completion of the transaction, as well as in Merck Millipore sites such as Darmstadt, Germany and Molsheim, France.

The two companies said, based on fiscal year 2013 financials, the combined life science business would have had sales of USD6.1bn, an increase of 79%, and combined EBITDA before one-time items of USD2.0bn, which is 139% higher.

As MRC wrote before, by acquiring a majority stake in InnovationLab GmbH, Merck and BASF, the world's largest petrochemical producer, are increasing their involvement in order to continue the successful scientific work of the Heidelberg-based research and transfer platform for organic electronics in the Rhine-Neckar metropolitan region.
MRC

PP imports in Belarus remained steady in January - July 2014

MOSCOW (MRC) - Imports of polypropylene (PP) in Belarus remained practically steady in the first seven months of this year, compared with the same time a year earlier, reaching 46,800 tonnes, according MRC DataScope report.

July PP imports in the country increased to 7,200 tonnes, compared with 6,200 tonnes in June. Total PP imports in Belarus were 46,800 tonnes in the first seven months of this year, which was practically equal to the same level of 2013. Growing demand for propylene copolymers from local converters offset reduced requirements in homopolymer PP.

Structure of PP consumption over the reported period was as follows. July homopolymer PP imports to Belarus increased to 5,100 tonnes, compared with 4,000 in June. Total imports of homopolymer PP in the country decreased to 31,700 tonnes in January - July 2014, compared with 34,400 year on year. Key suppliers of homopolymer PP in Belarus were Russian producers, their share for the period increased to 70%.

July imports of propylene copolymers were kept at the level of June and reached 2,200 tonnes. Propylene copolymers imports in the country grew to 15,100 tonnes in the first eight months of the year, up 20,9% year on year. The main suppliers of propylene copolymers in the local market were producers from Germany with a share of about 61%, the share of Russian producers in this segment did not exceed 8%.

As it was reported earlier, import duties for all PP grades was reduced to 6.5% from 1, September 2014, from former 9.1% for homopolymer PP and 8.3% for propylene copolymers. Imports of all PP grades from the CIS countries are not subject to import duty.
MRC

Rosneft and SIBUR sign cooperation agreement for supply of oil products

MOSCOW (MRC) -- Rosneft and SIBUR have signed a long-term partnership agreement for the development, testing and implementation of lubricants and other oil products, said the producer in its press release.

In accordance with the agreement, the parties will assess SIBUR's need for lubricants and other oil products and will work together to develop new lubricating materials suitable for the Company's equipment.

The parties also plan to pursue joint projects designed to replace imports of oil products. In addition, Rosneft and SIBUR will cooperate on training and technical consulting to improve personell expertise through an innovative approach to the supply of lubricants and other oil products.

The agreement will be in effect for five years and may be extended if the parties so agree.

As MRC wrote before, Governor of the Amur Region, and Pavel Lyakhovich, Member of the SIBUR Management Board and Managing Director, have signed a cooperation agreement between the Government of the Amur Region and the petrochemical holding. According to the agreement, both parties share a common interest in SIBUR's investment and its other programmes in the Amur Region, most notably the prospective construction of a gas chemical complex. The agreement provides that when investing in the Amur Region SIBUR will build on the local potential of the region, particularly with regards to its technical infrastructure, labour sourcing and liaison with educational institutions.

MRC

PVC imports to Belarus fell by 20.4% from January to July 2014

MOSCOW (MRC) -- Imports of unmixed polyvinyl chloride (PVC) into Belarus decreased by 20.4% over the first seven months of 2014 and totalled 21,300 tonnes, reported MRC analysts.

July PVC imports to Belarus rose to 3,700 tonnes under the pressure of seasonal factors from 3,000 tonnes in June. In general, demand for PVC from local converters dropped to 21,300 tonnes froom January to July 2014 versus 26,800 tonnes a year earlier.

Such a major fall in demand for PVC from local converters was caused by weaker demand for finished products from PVC both in the domestic market (over 30% year on year) and in foreign markets, including Russia (about 11%).

Germain producers with the share of over 50% of the total imports are key PVC suppliers to the local market. It should be noted a major increase in PVC shipments from Russia (1,200 tonnes).
MRC

Eastman adds non-phthalate product offering for European sealants market

MOSCOW (MRC) -- Eastman Chemical Company has announced an addition to its non-phthalate plasticizer portfolio with Eastman VersaBond plasticizer, reported the company on its site.

Designed specifically for polysulfide glazing sealant applications in the European market, Eastman VersaBond offers an efficient and easy replacement for traditional phthalate plasticizers that are coming under increased regulatory scrutiny.

With the enactment of Registration, Evaluation, Authorisation, and Restriction of Chemicals (REACH) by the European Union, manufacturers are now transitioning to non-phthalate options for their polysulfide insulated glass sealants. With this in mind, Eastman set out to meet the needs of the market by creating VersaBond.

"The need to replace traditional phthalate plasticizers without sacrificing product performance is creating challenges for Europe’s polysulfide sealant formulators and manufacturers," said Carlos Alvarado, Eastman’s Specialty Plasticizers business manager. "Eastman is responding to these challenges with innovative product offerings such as Eastman VersaBond plasticizer. VersaBond is a tailored non-phthalate solution that is backed by Eastman’s reliable technical support, market expertise, and global manufacturing resources."

As MRC informed earlier, Eastman Chemical had completed a previously-announced capacity expansion of its Eastman 168 non-phthalate plasticizers at its manufacturing facility in Texas City, Texas. The expansion at the site increased the overall capacity of Eastman 168 by approximately 15%.

Non-phthalate plasticizers are broadly used in products such as toys, childcare items, food contact materials and medical devices, and are also used to provide flexibility to PVC in a wide variety of applications. End markets for non-phthalate plasticizers include building and construction, health and wellness, and a broad range of consumer products.

Eastman is a global specialty chemical company that produces a broad range of products found in items people use every day. With a portfolio of specialty businesses, Eastman works with customers to deliver innovative products and solutions while maintaining a commitment to safety and sustainability. Its market-driven approaches take advantage of world-class technology platforms and leading positions in attractive end-markets such as transportation, building and construction and consumables. Eastman focuses on creating consistent, superior value for all stakeholders. As a globally diverse company, Eastman serves customers in approximately 100 countries and had 2013 revenues of approximately USD9.4 billion. The company is headquartered in Kingsport, Tennessee, USA and employs approximately 14,000 people around the world.
MRC