Chemicals sector comment – July 2011


Dow is preparing for the sale of its polypropylene units as part of its refocusing on speciality chemicals.

The creation of the group’s Performance Plastics division followed its acquisition of Rohm & Haas and its failed $17.4bn deal to sell its polyethylene unit and other commodity plastics businesses to Kuwaiti group PIC. The sale of its PP activities would emphasise the group’s strategy of moving towards technologically-differentiated plastics such as solution elastomers and polyethylene, as well as emulsion, epoxy and polyurethane polymers. The March 2010 sale of the group’s Styron division to Bain Capital was the first step in the group’s move away from commodity activities. The non-core unit includes two PP production sites in Texas and two more in Germany.

Last year Brazilian petrochemical group Braskem acquired Sunoco’s North American PP operations, whilst Reliance Industries of India is seeking access to the North American market. Other potential buyers for Dow’s PP assets are petrochemical groups such as LyondellBasell, Sabic and Shell. In order to maximise the returns, Dow may also consider selling the North American and European PP units separately.


3M Co has acquired Advanced Chemistry & Technology Inc (AC TECH), a US manufacturer of aerospace sealants. The acquisition of AC TECH will expand 3M’s product presence in the market for sealants used and maintenance of commercial and military aircraft at a time when a number of new platforms are coming to market.

Esseco Group SpA has acquired Altair Chimica Srl, an Italian manufacturer of caustic potash and other chemicals derived from chloride. The acquisition will increase Esseco’s production capacity in the Italian market.

Roquette SA has acquired a minority stake in Amilina AB, a Lithuanian starch manufacturer. The acquisition will position Roquette as the largest supplier of gluten, starch and wheat coproducts in the Baltic and Nordic regions.

Oxford Performance Materials Inc (OPM) has acquired the polyether ketone ketone (PEKK) medical business of Arkema SA. The product range acquired by OPM focuses on the production of PEKKs used in medical implants. The sale will allow the French group to focus its PEKK business on the production of materials used in aerospace and oil and gas applications. PEKKs offer abrasion resistance, high-temperature and chemical resistance, optimal mechanical properties and natural flame retardancy.

Imdex Ltd has acquired Australian Drilling Specialties Pty Ltd, an Australian manufacturer of drilling chemicals and fluids. The $12m acquisition will enhance Imdex’s production capacity and give it greater control of its supply chain.

BSR Group SA has acquired Axson Technologies SA, a French manufacturer of epoxy resins and polyurethanes systems. The addition of Axson’s product range will enhance BSR’s presence in the market for advanced materials, composites, encapsulation resins and structural adhesives used in the electric and electronic industries. The transaction provides an exit for French private equity firm OFI Private Equity.

GEO Specialty Chemicals Inc has acquired the Bisomer monomer business of BASF SE. The UK-based unit is a manufacturer of hydroxy methacrylates, multifunctional methacrylates, polyalkylene glycols (PAG) and PAG-based lubricants. The acquisition will be integrated into GEO’s Paints & Coatings division . The transaction follows the European Commission’s ruling that BASF should divest the hydroxy monomer business following its December 2010 acquisition of Cognis AG.

KCC Corp has acquired Basildon Chemical Co Ltd, a UK manufacturer of silicone formulations. Basildon’s product range includes silicone antifoams, emulsions, fluids and greases used in food processing, industrial, personal care and pharmaceutical applications. KCC has also acquired Samwoo Tech Co, a South Korean manufacturer of organic silicones.

Royal DSM NV has acquired C5 Yeast Co BV, a Dutch developer and producer of enzyme and yeast technologies for second generation biofuels. The acquisition will add technologies for the conversion of specific fractions of biomass to DSM’s portfolio where it is developing fermentation technology for mixed sugars derived from agricultural residues and non-edible crops.

US industrial investor Berwind Group LLC has acquired BWA Water Additives Ltd, an UK supplier of water treatment chemicals. BWA specialises in treatment chemicals used in desalination plants, as well as in the control of bacteria and the prevention of Legionnaires Disease in water storage systems. The transaction provides an exit for Bahraini private equity firm Seera.

Israel Chemicals Ltd has acquired Cosmocel Quimica SA de CV, a subsidiary of Cosmocel Group SA de CV. Cosmocel Quimica is a Mexican manufacturer of functional food ingredients and speciality phosphate chemicals used in the bakery, beverage and dairy markets. The unit will be integrated into the Israeli group’s ICL Performance Products division.

Hempel AS has acquired Crown Paints Ltd, a UK manufacturer of decorative coatings. The transaction provides an exit for UK private equity firm Endless that acquired Crown Paints from Akzo Nobel NV in August 2008 following the Dutch group’s acquisition of Imperial Chemical Industries plc.

PPG Industries Inc has acquired Ducol Coatings Pty Ltd, a South African distributor of automotive refinishing products in South Africa. The acquisition will allow PPG to directly serve customers in the automotive refinishing market in South Africa.

Kaneka Corp has acquired the acrylate-based plastic additives and plastisols business of Evonik Industries AG. The plastic additives manufactured by the unit are used as processing aids or impact modifiers for PVC and engineering plastics, whilst the plastisols are used in the automotive industry as a PVC substitute for underbody protection and as sealants.

Pan-European private equity firm Triton has acquired the Compo subsidiary of K+S AG. Compo is a German supplier of fertilisers sold through DIY and garden centre channels. The sale will allow K+S to focus on its core magnesium, potash and salt operations.

CABB GmbH has acquired KemFine Group Oy, a Finnish custom manufacturer of fine chemicals for the agrochemical and pharmaceutical industries. The transaction marks the first bolt-on acquisition for CABB following its acquisition by UK private equity firm Bridgepoint Capital in March 2011.

Pan-European private equity firm Investindustrial has acquired the North American composites and coating resins business of Momentive Specialty Chemicals Inc. The unit is a manufacturer of coating and composite resins for coating formulators and composite moulders throughout North America.

Murugappa Group Ltd has acquired a 73% stake in Sabero Organics Ltd, an Indian manufacturer of crop protection chemicals. Sabero’s products include fungicides, herbicides and insecticides. The acquisition will be integrated into Murugappa’s Coromandel International subsidiary.

Bayer AG has acquired SoyTech Ltd, a Brazilian developer of seed improvement technologies. The acquisition will be integrated into Bayer’s CropScience division where it will enhance the unit’s operations in the South American market.

Eastman Chemical Co has acquired Sterling Chemicals Inc, a US petrochemical producer. The $100m acquisition includes Sterling’s acetic acid and plasticizer manufacturing assets in Texas City, Texas. In response to the increasing demand for non-phthalate plasticizers Eastman plans to modify and restart Sterling’s currently idled plasticizer manufacturing facility.

Ineos AG has acquired the chlor-vinyls business of Tessenderlo NV for $160m. The transaction includes the caustic potash, caustic soda and vinyl chloride monomer operations of Tessenderlo’s Organic Chloride Derviatives business. The acquisition will be integrated into Kerling plc.

Brenntag AG has acquired a 51% stake in Zhong Yung International Chemical Ltd, a Chinese solvents distributor. The acquisition will establish a platform for Brenntag in the Chinese market supplying solvents to the adhesives, automotive refinishing, coatings, electronic chemicals, paints and printing inks sectors.