Chemical plants consolidating

Posted by / 26-Feb-2020 10:48

Chemical plants consolidating

Should Akzo Nobel eventually decide to sell its paints and coatings business to PPG (it spurned several PPG offers earlier this year, but PPG can re-engage beginning December 2017), Axalta would be in a similar position to acquire attractive assets.

The efforts, expected to continue through October 2019, will focus on improving accountability for safety loopholes and enhancing oversight and regulation of companies, according to the SAMR.Through careful, consistent observation of the businesses we follow and the environments in which they compete, the Diamond Hill research team strives to build a cumulative knowledge base over time.This knowledge, coupled with our intrinsic value philosophy, enables us to uncover attractive investment opportunities.The industrial gas industry is even more consolidated than the coatings industry and, similar to coatings, these companies generally enjoy pricing power and earn above average returns on invested capital.Although expected cost synergies from the merger are fairly low at ~2.5% of combined revenues, I believe there could be upside to these estimates driven by Praxair management running the Linde plants more efficiently than Linde has operated them historically.

chemical plants consolidating-83chemical plants consolidating-7chemical plants consolidating-72

Finally, several acquisitions (Bayer/Monsanto, PPG/Akzo Nobel, Sherwin Williams/Valspar) were at least in part aided by the low cost of debt financing available in the capital markets.

One thought on “chemical plants consolidating”