Idemitsu delays Showa Shell stake purchase as regulatory review not finished

MOSCOW (MRC) -- A Japanese refiner Idemitsu Kosan Co has postponed its acquisition of Showa Shell Sekiyu shares as regulatory approval is taking longer than expected - a delay that comes amid uncertain prospects for the deal due to a spat with the Idemitsu founding family, reported Reuters.

Idemitsu management now expects to purchase its stake from Royal Dutch Shell in October or November instead of this month.

Public broadcaster NHK reported the review by Japan's Fair Trade Commission was taking time as it is also reviewing another merger in the sector - the planned takeover of TonenGeneral Sekiyu KK by JX Holdings Inc.

A Fair Trade Commission spokesman declined to comment.

In July last year, Idemitsu Kosan agreed to buy a 33.3 percent stake for about 170 billion yen (1.27 billion pounds), with plans to buy the rest of Showa Shell shares with a share swap at a later date.

As with the JX-Tonen deal, the government has been keen for the sector to consolidate as demand for gasoline in Japan has been on the decline due to a shrinking population.

The Idemitsu family, which claims to control enough votes to veto the deal, has argued the company's close connection to Iran makes a merger with Showa Shell, which has close ties to Saudi Arabia, difficult. Analysts say the family, which owns just over a third of Idemitsu, is more likely concerned that its stake in the company would be diluted.

The founding family has moved to block the deal by purchasing a 0.1 percent stake in Showa Shell, sufficient to complicate any takeover as it raises the prospect that Idemitsu would, contrary to current plans, have to make an expensive tender offer for Showa Shell shares.

With the family's purchase, Showa Shell holdings owned by Idemitsu and related parties would exceed a third. By law, Idemitsu management would have to launch a takeover bid on the open market that would attract other shareholders eager to sell at the agreed price of 1,350 yen - more than 50 percent higher than the current price.

Idemitsu said on Wednesday that it and Showa Shell still planned to launch their combined company on April 1 next year. Previously it has said it aims to resolve the dispute with the founding family through talks.

A Shell spokesman said: "Shell is committed to selling the majority of its shareholding in Showa Shell, as agreed with Idemitsu in July 2015. We trust that regulatory approval will be granted swiftly so that the transaction can be completed, in accordance with all legal requirements, soon."

"Separately, we remain supportive of the proposed merger between Idemitsu and Showa Shell," the spokesman said.

To get round any requirement that Idemitsu might have to make a general offer for all Showa Shell shares, Idemitsu management is looking at possibly cutting the size of the stake it plans to purchase from Royal Dutch Shell, a person with direct knowledge of the matter has told Reuters.

Idemitsu has declined to comment on that possibility.

Royal Dutch Shell plc is an Anglo-Dutch multinational oil and gas company headquartered in The Hague, Netherlands and with its registered office in London, United Kingdom. It is the biggest company in the world in terms of revenue and one of the six oil and gas "supermajors". Shell is vertically integrated and is active in every area of the oil and gas industry, including exploration and production, refining, distribution and marketing, petrochemicals, power generation and trading.

Idemitsu Kosan is a Japanese petroleum company. It owns and operates oil platforms, refineries and produces and sells petroleum, oils and petrochemical products. The company runs two petrochemical plants in Chiba and Tokuyama. The two naphtha crackers can produce up to 997,000 tonnes of ethylene per year.
MRC

MOSCOW (MRC) -- AkzoNobel has named Thierry F.J. Vanlancker as the future Executive Committee member responsible for Specialty Chemicals, effective February 1, 2017, said the company on its site.

He will succeed Werner Fuhrmann , who has decided to retire from the company next year, after 37 years of service. Vanlancker, a Belgian national, was most recently President - Fluoroproducts for Chemours, the spin-off company of DuPont's chemical businesses formed in 2015. He joined DuPont in 1988 and has held a number of senior positions both in Europe and the US.

Commenting on the announcement, AkzoNobel CEO Ton Buchner said: "We are delighted to have such an experienced chemical industry professional as Thierry join AkzoNobel. We look forward to him building on the fantastic momentum Werner has achieved, taking the Specialty Chemicals business to new levels."

Vanlancker added: "I am delighted to be taking up this role at AkzoNobel, a company I greatly admire. I am looking forward to helping the company and the Specialty Chemicals business achieve its vision of delivering leading performance and profitable growth."

As MRC informed earlier, AkzoNobel said on 9 June that it is adding marine and protective coatings capacity at its existing performance coatings site at Lipetsk, south of Moscow.

Akzo Nobel N.V., trading as AkzoNobel, is a Dutch multinational, active in the fields of decorative paints, performance coatings and specialty chemicals. Headquartered in Amsterdam, the company has activities in more than 80 countries, and employs approximately 55,000 people.

MRC

MOSCOW (MRC) -- Evonik has been included in the prestigious "Dow Jones Sustainability Index (DJSI) World" and also "DJSI Europe" for the first time. The specialty chemicals company gained particularly high ratings in all environmental criteria, as per the company's press release.

Thomas Wessel, the Executive Board member responsible for sustainability: "Being included in the DJSI indices World and Europe is an important milestone for us. We are delighted by this acknowledgement of Evonik's commitment to sustainability. It affirms that contributions to sustainability and economic success are working hand in hand. Sustainability is increasingly driving innovation and profitable growth."

Alongside financial criteria, investors increasingly include ecological and social factors in their investment decisions. They are guided by leading sustainability indices such as the DJSI. Every year around 2,500 companies worldwide are invited to participate. In each sector the best of the participating companies are included in the DJSI. The assessment is performed by the Swiss rating agency RobecoSAM.

In January 2016, RobecoSAM included Evonik in its yearbook of economic, social and ecological performance as a "Sustainability Leader" with the distinction "Silver Class".

As MRC informed before, Evonik Industries invested over EUR400 mln in its plants in Germany in 2015. Last year, Evonik once again demonstrated its considerable power to create at its German sites. Thus, according to a recent projection, the company invested more than EUR 400 million in its domestic production plants. The lion’s share of the funds (around two-thirds) was divided among Evonik’s five-largest sites in Germany: Marl (hundreds of millions of euros), Hanau, Essen, Darmstadt, and Wesseling (tens of millions of euros at each site).

Evonik, the creative industrial group from Germany, is one of the world leaders in specialty chemicals. Its activities focus on the key megatrends health, nutrition, resource efficiency and globalization. Evonik benefits specifically from its innovative prowess and integrated technology platforms. Evonik is active in over 100 countries around the world. In fiscal 2013 more than 33,500 employees generated sales of around EUR12.9 billion and an operating profit (adjusted EBITDA) of about EUR2.0 billion.
MRC

MOSCOW (MRC) -- BASF, the world’s largest chemical producer, says that it will establish an additional production line for Ultrason polyarylsulfone products at the company's site at Yeosu, South Korea, reported Chemweek.

Ultrason is the trade name for BASF’s range of polyethersulfone, polysulfone, and polyphenylsulfone. The new production line will start up at the end of 2017, adding a production capacity of 6,000 metric tons/year and bringing BASF’s total capacity of Ultrason to 24,000 metric tons/year. BASF produces Ultrason at Ludwigshafen, Germany; and Yeosu. BASF opened the existing Ultrason plant at Yeosu in 2014. The additional capacity at Yeosu is for the entire product range. The expansion is in response to worldwide market growth, BASF says.

Ultrason products are used in applications in the consumer, electronics, automotive, and aerospace industries. Common applications include heat-resistant, lightweight components in household appliances or fittings for drinking-water pipes, BASF says. The market growth of polyarylsulfones is strongest for filtration membranes in technical and health-care applications, especially in Asia’s emerging markets, BASF says.

“This investment strengthens our competitive position and increases our flexibility to provide all grades of Ultrason to our customers in Asia and worldwide,” says Kin Wah Chay, v.p./global business management, specialty plastics at BASF.

As MRC wrote before, in March 2016, Kolon Plastics and BASF signed an agreement to establish a joint venture in Korea to manufacture polyoxymethylene (POM), an engineering plastic used in industrial, transportation, construction and consumer markets. The 50:50 joint venture named "Kolon BASF innoPOM, Inc." will have an annual capacity of 70,000 metric tons. It will be located at the existing manufacturing site of Kolon Plastics in Gimcheon, Korea, which already includes a POM production. The start of operation is scheduled for the second half of 2018 creating in total the world’s largest complex for the production of POM.

BASF is the largest diversified chemical company in the world and is headquartered in Ludwigshafen, Germany. BASF produces a wide range of chemicals, for example solvents, amines, resins, glues, electronic-grade chemicals, industrial gases, basic petrochemicals and inorganic chemicals. The most important customers for this segment are the pharmaceutical, construction, textile and automotive industries. BASF generated sales of more than EUR70 billion in 2015.
MRC

MOSCOW (MRC) -- Australian packaging company Amcor Ltd said it will buy a plastic container manufacturing business from U.S.-based Sonoco Products Co (SON.N) for USD280 million, said Reuters.

The acquired business, Sonoco Specialty Containers, makes moulded packaging for food, drink and pharmaceuticals, Amcor said in a statement. It will expand Amcor's rigid plastics division and allow the company to access U.S customers, Amcor said.

"Part of our strategy to grow this business includes acquiring specialized manufacturing capabilities which unlock further growth," Amcor Chief Executive Ron Delia said in the statement.

The acquisition remains subject to approval from U.S. regulators.

As MRC informed earlier, Amcor Ltd. has entered into an agreement to buy an Indonesian flexible packaging business, Jakarta-based Bella Prima Packaging Ltd., for USD25.2 million.

Amcor Limited is an Australian-based multinational packaging company. It operates manufacturing plants in 42 countries. It is the world's largest manufacturer of plastic bottles.
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