Phase II Review for Huntsman-Rockwood Deal - Analyst Blog
March 03 2014 - 7:25PM
Zacks
Chemical company Huntsman Corporation (HUN)
said that it expects the European Commission to conduct an in-depth
investigation (phase II) on its earlier announced buyout of
Rockwood Holdings’ (ROC) Performance Additives and
Titanium Dioxide (TiO2) Pigments businesses.
The European Commission is expected to have up to 125 working
days to make a final verdict on whether the pending acquisition
would materially impede effective competition in the European
economic area. Huntsman is currently working with the
representatives of the European Commission as the latter continues
its analysis over the deal.
Huntsman, in Sep 2013, landed a deal with Rockwood to buy the
latter’s Performance Additives and TiO2 businesses. Huntsman agreed
to pay $1.1 billion in cash and assume $225 million in pension
obligations. The deal received antitrust clearance in the U.S. in
Dec 2013.
TiO2 Pigments was Rockwood’s biggest business unit in 2012
with revenues of roughly $889 million, representing around 25% of
its total sales. The divestiture is in sync with Rockwood’s goal to
become a more focused specialty chemical company.
Huntsman is a major producer of TiO2, polyurethane and other
specialty materials. The acquisition will make the company the
world's second-largest TiO2 producer.
The acquisition will not only enable Huntsman to better serve
its customers through a broader range of products, but will also
offer an attractive opportunity to unlock value within its pigments
business. The acquisition is expected to be accretive to the
company’s earnings per share for 2014 and offer meaningful cost
saving opportunities.
Huntsman with annual sales of more than $11 billion makes
differentiated chemicals. The company makes products for an array
of industries including chemicals, plastics, automotive, aviation,
textiles, paints and coatings, construction, technology,
agriculture, health care, appliances and packaging.
Huntsman is a Zacks Rank #3 (Hold) stock.
Other companies in the chemical space with favorable Zacks
Rank are Northern Technologies International Corp.
(NTIC), The Dow Chemical Co. (DOW) and
Methanex Corp. (MEOH). While Northern Technologies
holds a Zacks Rank #1 (Strong Buy), both Dow Chemical and Methanex
retain a Zacks Rank #2 (Buy).
DOW CHEMICAL (DOW): Free Stock Analysis Report
HUNTSMAN CORP (HUN): Free Stock Analysis Report
METHANEX CORP (MEOH): Free Stock Analysis Report
NORTHERN TECH (NTIC): Free Stock Analysis Report
ROCKWOOD HLDGS (ROC): Free Stock Analysis Report
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