AkzoNobel joins race to acquire Tikkurila with USD1.7-billion bid

MOSCOW (MRC) -- AkzoNobel says that it has made a non-binding proposal to acquire Tikkurila for EUR31.25/share, valuing Tikkurila at about EUR1.4 billion (USD1.7 billion), reported Chemweek.

The company says that the offer represents a 113% premium compared with the volume-weighted average trading price of Tikkurila shares during the three-month period prior to 17 December 2020, when an initial offer to acquire Tikkurila was made by PPG Industries. It also notes that it is 13% higher than PPG’s revised bid, made on 5 January 2021 - in response to a rival bid from Hempel (Lyngby, Denmark) as Tikkurila disclosed on 18 January. PPG launched its tender offer for Tikkurila on 14 January after it had been recommended by Tikkurila's board.

AkzoNobel, meanwhile, says it has agreed on key terms with Hempel for the sale of assets, including the decorative paints business of AkzoNobel in the Nordic and Baltic countries, to obtain merger clearance and ensure deal certainty for Tikkurila and its shareholders. The planned divestments would be completed after closing of AkzoNobel's proposed offer for Tikkurila, the company says. Thierry Vanlancker, CEO of AkzoNobel, declined to comment on the scale of divestments in an analysts' presentation held by AkzoNobel earlier today.

“Our complementary geographic profiles would create superior value compared to any other combination, including growth opportunities for the company and its employees. Our collective procurement capabilities, expanded production, and combined sales and distribution channels would deliver substantial value creation,” says Thierry Vanlancker, CEO of AkzoNobel.

The main offices and production facilities of Tikkurila in Finland would become the hub for the combined business in the Baltic region and substantial investment would be made in production facilities to supply future growth, AkzoNobel says.

The transaction is expected to be earnings per share (EPS) accretive in 2022, is aligned with the capital-allocation priorities of AkzoNobel, and would be financed using existing cash and credit lines, the company says. During the presentation today, Maarten De Vries, CFO at AkzoNobel, said that the company sees a mid-term return on investment (ROI) period of 3-5 years for the proposed deal. In addition, AkzoNobel will continue its EUR300-million share buyback program and maintains a target leverage ratio of 1-2 times net debt/EBITDA, the company says.

Vanlancker said during the analysts’ briefing that AkzoNobel had not made an offer to acquire Tikkurila earlier, because the company was not aware that Tikkurila was thinking of making a strategic change. PPG’s offers triggered the company’s decision to submit its own offer, since it sees Tikkurila as a perfect fit in its bolt-on acquisitions strategy and believes that AkzoNobel could create better value for Tikkurila, he added.

Vanlancker also said that there have been no talks with Tikkurila’s shareholders and that AkzoNobel is waiting on Tikkurila’s board to assess the offer. “With this offer, AkzoNobel invites the board of directors of Tikkurila to enter into negotiations with a view to reaching agreement on a recommended voluntary public cash tender offer,” the company says.

Tikkurila says that its board will consider AkzoNobel’s potential offer from the point of view of Tikkurila and its shareholders. It notes that AkzoNobel’s offer is non-binding and subject to several conditions, and there can be no certainty that this proposal will eventually lead to any agreement between AkzoNobel and Tikkurila.

The finalization of the potential is subject to customary conditions substantially similar to those included in the current tender offer document published by PPG on 14 January 2021, Tikkurila says. It requires reaching a 90% acceptance level and obtaining required regulatory approvals, and would not be conditional on financing, it says.

In addition, Tikkurila says that PPG’s offer continues to be valid in accordance with its terms as set out in the tender offer document. Tikkurila's board may withdraw, modify or amend its recommendation for PPG’s tender only if the board has complied with certain agreed procedures allowing PPG to negotiate with it and to amend the terms and conditions of its tender offer pursuant to the combination agreement, the company says.

AkzoNobel will continue to build on the “growth momentum” it has in the EMEA region and move on to other M&A targets it has in its pipeline, if the Tikkurila deal does not go through, Vanlancker said during the presentation. Analysts at Bernstein (London, UK) say that AkzoNobel’s chances of acquiring Tikkurila will depend largely on PPG's willingness to raise its offer further.

PPG engaged in a hostile effort to merge with AkzoNobel in 2017, supported by activist investor 40 North Management. The effort was stymied in part by Dutch securities law.

As MRC informed previously, in February 2020, PPG said it had completed its acquisition of Industria Chimica Reggiana (ICR, Reggio Emilia, Italy), a maker of automotive refinish products. Financial terms of the deal, including purchase price, were not disclosed. The deal was announced on 8 January. ICR was founded in 1961 and employs about 180 people. ICR manufactures automotive refinish products, including putties, primers, basecoats and clear coats. It also makes a range of coatings, enamels and primers for light commercial vehicles and other light industrial coatings applications. ICR employs about 180 people and sells its products in more than 70 countries in Europe, Africa, the Middle East, the US and Latin America.

We remind that Russia's output of chemical products rose in November 2020 by 9.5% year on year. At the same time, production of basic chemicals increased in the first eleven months of 2020 by 6.6% year on year, according to Rosstat's data. According to the Federal State Statistics Service of the Russian Federation, polymers in primary form accounted for the greatest increase in the January-November 2020 output. November production of polymers in primary form rose to 896,000 tonnes from 852,000 tonnes in October. Overall output of polymers in primary form totalled 9,240,000 tonnes over the stated period, up by 17.1% year on year.
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MOSCOW (MRC) -- Shipments of chemicals through the port of Antwerp, Belgium, declined 8.9% in 2020 compared to 2019, although no full-year chemical volumes total has been made available, said Chemweek.

Annual liquid bulk volumes declined by 4.2% in total year on year (YOY) to 69 million metric tons (MMt) in 2020, with crude oil shipments plummeting 60% YOY due to reduced refining activities, says Port of Antwerp. Throughput of oil derivatives, however, recovered with growth of 3.4% despite an initial fall in demand due to the coronavirus pandemic and the sharp drop in oil prices, it says. Fertilizer shipments also declined YOY, but no specific volume figure was given.

The port’s overall throughput last year totaled 230.8 MMt of cargo, a fall of 3.1% compared with 2019, with the relatively small decline due largely to “buoyant container throughput rates,” which set a new record, it says. Container throughput surpassed the 12 million twenty-foot equivalent units (TEUs) mark for the first time ever in 2020, totaling 139 MMt, equating to growth of 1.3% compared with 2019, it says.

"We were caught up in a storm in 2020, but we stayed upright. The port has even set another record in container throughput. This enabled us to limit the damage due to losses in other segments and to present better figures than other ports,” says Jacques Vandermeiren, Port of Antwerp’s CEO. Vandermeiren remains “convinced” that the ports ongoing projects, such as its carbon dioxide (CO2) reduction project Antwerp, a recently formed hydrogen coalition, and the development of the new NextGen District will be “major game changers within the next 10 years."

We remind that Russia's output of chemical products rose in November 2020 by 9.5% year on year. At the same time, production of basic chemicals increased in the first eleven months of 2020 by 6.6% year on year, according to Rosstat's data. According to the Federal State Statistics Service of the Russian Federation, polymers in primary form accounted for the greatest increase in the January-November 2020 output. November production of polymers in primary form rose to 896,000 tonnes from 852,000 tonnes in October. Overall output of polymers in primary form totalled 9,240,000 tonnes over the stated period, up by 17.1% year on year.
MRC

MOSCOW (MRC) -- Axalta has issued USD700 million in senior bonds due 2029 to institutional buyers in a bid refinance debt, according to Chemweek.

The bonds will carry an interest rate of 3.375%, and the offering was upsized from an initial announcement of USD600 million.

Proceeds from the new bonds will refinance two tranches of senior bonds, both due 2024. One USD500 million tranche carries an interest rate of 4.875%, and the other EUR335 million (USD397 million) tranche carries an interest rate of 4.250%. The new bond offering closed on 24 November, 2020.

As MRC reported before, in early November, 2020, Axalta said that it will realign its business structure to fold most organizational functions into its two global business units, transportation coatings and performance coatings.

The plan follows earlier restructuring moves announced over last summer, and will involve the closure of Axalta’s offices in Center City, Philadelphia. Employees at those offices will be transferred to Glen Mills, Pennsylvania, a Philadelphia suburb that will become the site of Axalta’s headquarters, or to an office at the Philadelphia Navy Yard. Axalta’s regional headquarters at Basel, Switzerland and Shanghai, China will remain open and regional leaders will continue to play an important role in the organization, the company says. The reorganization became effective 1 January 2021, and the office closures and shifts in the Philadelphia area will occur in the middle of this year.

We remind that Russia's output of chemical products rose in November 2020 by 9.5% year on year. At the same time, production of basic chemicals increased in the first eleven months of 2020 by 6.6% year on year, according to Rosstat's data. According to the Federal State Statistics Service of the Russian Federation, polymers in primary form accounted for the greatest increase in the January-November 2020 output. November production of polymers in primary form rose to 896,000 tonnes from 852,000 tonnes in October. Overall output of polymers in primary form totalled 9,240,000 tonnes over the stated period, up by 17.1% year on year.
MRC

MOSCOW (MRC) -- Specialty packaging thermoformer Lacerta Group Inc. has been acquired by New York City-based private investment firm SK Capital LP for an undisclosed amount, said Canplastics.

Founded in 1993 and headquartered in Mansfield, Mass., Lacerta makes packaging primarily for the food sector. The company offers a range of custom PET packaging products, including a line of tamper-evident products sold under the “Fresh N’ Sealed” brand.

The company has also developed a face shield made from PET resin for use by healthcare and retail workers. Lacerta’s co-founders, Ali and Mory Lotfi, will remain with the company and retain a significant ownership stake, SK Capital said in a Jan. 11 news release.

Lacerta has experienced top-line growth of 25% annually since 2013, the news release added.

"Ali, Mory and the Lacerta team have built an exceptional business with a best-in-class reputation for customer service, innovation and sustainable products,” said Jack Norris, managing director of SK Capital. “We look forward to partnering with Ali and Mory to support the continuation of Lacerta’s extraordinary growth. Our mutual focus is on preserving Lacerta’s customer-centric approach, which is highly differentiated in the market, while at the same time putting in place the required systems, processes and capabilities that will enable the company to scale alongside its expanding customer base."

As per MRC, SK Capital Partners completed the acquisition of a 39.75% stake, roughly 42.4 million shares, in titanium dioxide maker Venator from Huntsman for roughly USD100 million. The deal includes a 30-month option for the purchase of Huntsman’s remaining approximate 9.5 million shares by SK at US2.15/share. Huntsman spun off Venator in a 2017 initial public offering.

As MRC reported earlier, Nanjing Jinling Huntsman, a joint venture between Huntsman and Sinopec Jinling, planned to shut its propylene oxide plant in Nanjing (Nanjing, Jiangsu Province, China) on November 1 for scheduled maintenance. This plant with a capacity of 240,000 tonnes/year of propylene oxide will be closed until approximately 25 November.

Propylene is the main feedstock for the production of polypropylene (PP).

According to MRC's DataScope report, PP imports into Russia increased by 21% year on year to about 202,000 tonnes in the first eleven months of 2020. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.
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MOSCOW (MRC) -- Azelis says it has signed an exclusive distribution deal for Mane’s (Le Bar sur Loup, France) flavor and fragrance products in the Benelux region, including Belgium, the Netherlands, and Luxembourg, reported Chemweek.

The deal is effective from January 2021.

“This new partnership will enable MANE to extend its presence to nearly full market coverage as well as seeing a number of its existing customers being serviced more efficiently by the dedicated Azelis teams,” says Renaud Milliard, flavor distribution director/EMEA at Mane.

Mane is family owned maker of flavor and fragrance products. The company has about 6,000 employees globally.

As MRC informed earlier, in October 2020, Azelis opened a new application and training center in Istanbul, Turkey. This center will service the Turkish food, personal care and pharma markets and will offer product advice, formulation development and technical research. Next to that, it will host customer meetings, interactive formulation workshops, supplier meetings and internal technical trainings.

We remind that Russia's output of chemical products rose in November 2020 by 9.5% year on year. At the same time, production of basic chemicals increased in the first eleven months of 2020 by 6.6% year on year, according to Rosstat's data. According to the Federal State Statistics Service of the Russian Federation, polymers in primary form accounted for the greatest increase in the January-November 2020 output. November production of polymers in primary form rose to 896,000 tonnes from 852,000 tonnes in October. Overall output of polymers in primary form totalled 9,240,000 tonnes over the stated period, up by 17.1% year on year.
MRC