BERLING: Germany’s Lanxess will buy U.S.-based specialty chemicals firm Chemtura (CHMT) for $2.12 billion cash, the latest in a series of cross-border chemical deals.
Lanxess will pay $33.50 a share for each shares of Philadelphia-based Chemtura. That’s a 19% premium to Chemtura’s close Friday. The Lanxess-Chemtura deal will have an enterprise value of $2.5 billion.
Chemtura rose 16% to 32.75 before the opening bell on the stock market today. Earlier this month, Germany chemicals firm Bayer (BAYRY) agreed to pay $66 billion, or $128 a share, for seeds and herbicide giant Monsanto (MON), after raising the bids several times. Monsanto shares, which were at 106.10 before the deal, have drifted down to 103.50, reflecting concerns that the merger won’t pass antitrust muster.
Germany’s Lanxess will buy U.S.-based specialty chemicals firm Chemtura (CHMT) for $2.12 billion cash, the latest in a series of cross-border chemical deals.
Lanxess will pay $33.50 a share for each shares of Philadelphia-based Chemtura. That’s a 19% premium to Chemtura’s close Friday. The Lanxess-Chemtura deal will have an enterprise value of $2.5 billion. Chemtura rose 16% to 32.75 before the opening bell on the stock market today.
Earlier this month, Germany chemicals firm Bayer (BAYRY) agreed to pay $66 billion, or $128 a share, for seeds and herbicide giant Monsanto (MON), after raising the bids several times. Monsanto shares, which were at 106.10 before the deal, have drifted down to 103.50, reflecting concerns that the merger won’t pass antitrust muster.
IBD’S TAKE: The domestic chemical industry is booming, with U.S. and foreign companies spending some $170 billion on 268 projects. Credit cheap natural gas at home. Read more about the renaissance in “Shale 2.0: A Follow-On Boom In The U.S. Chemicals Trade.”
Get instant access to exclusive stock lists and powerful tools on Investors.com. Try us free for 4 weeks.Monsanto previously had sought to buy Swiss-based Syngenta (SYT), but Syngenta rebuffed those advances, in part on antitrust concerns. Syngenta has accepted a takeover offer form China’s ChinaChem.
Also this month, Praxair and Germany’s Linde ended talks on an industrial gases megamerger, with the fate of Linde’s Munich headquarters an apparently sticking point.
One advantage to foreign takeovers of U.S. companies is that the change of ownership can lower the tax bill of the newly acquired firm. The Obama administration has tightened restrictions on tax inversions, wherein U.S. companies buy a foreign firm but redomicile overseas to lower taxes on non-U.S. operations. But that does nothing to reduce the tax incentives of foreign purchases of American companies.
Amid the cross-border chemical romances, there are domestic tie-ups. DuPont (DD) and Dow Chemical (DOW) have agreed on a merger of equals. The combined DuPont-Dow Chemical firm then plans to split into one firm, including one focused on agricultural operations.
