Notable Mergers and Acquisitions of the Day 03/14: (DOW) (E)/(PTR) (HUN)

March 14, 2013 10:27 AM EDT
* Dow Chemical Co. (NYSE: DOW) announced additional actions to accelerate the Company’s ongoing commitment to aggressive portfolio management, as outlined at its Investor Forum in December 2012. As a result of thorough, ongoing portfolio reviews in a slow-growth world, Dow is targeting an increased divestiture list of nearly $1.5 billion over the next 18 months. Further, the Company has identified two units that will be actively marketed for divestment: Dow’s Polypropylene Licensing and Catalysts business unit and its Plastics Additives business unit.

“Today’s announcement is yet another proof point of Dow’s rigorous focus on return on capital, and is squarely in line with commitments we made earlier this year,” said Andrew N. Liveris, Dow’s chairman and chief executive officer. “We are reviewing our entire portfolio and seeking even further opportunities to optimize value: selectively pruning assets that are no longer a strategic or financial fit – all in an effort to accelerate value creation and deliver long-term, sustainable growth for the Company.”

These actions are the latest in a series of steps the Company has taken to further enhance Dow’s leadership position in high-margin, fast-growing end-markets, while simultaneously optimizing the value of assets. Since 2009, Dow has divested non-core businesses representing approximately $8 billion in revenue. In January, the Company divested the stabilizers component of its Plastics Additives business, and entered into a definitive agreement to sell its 50 percent ownership in Nippon Unicar Company Limited (a Japanese joint venture in the Dow Electrical and Telecommunications business).

* ENI S.p.A. (NYSE: E) CEO, Paolo Scaroni, and the CEO of Petrochina Company Limited (NYSE: PTR), controlled by China National Petroleum Corporation (CNPC), Zhou Jiping, signed an agreement in Beijing for Eni’s sale to CNPC of 28.57% of Eni East Africa’s shares, owner of the 70% interest in Area 4, in Mozambique. With this operation, CNPC indirectly acquires a 20% stake in Area 4, while Eni remains the owner of 50%. The remaining shares in the Area are held by Empresa Nacional de Hidrocarbonetos de Mocambique (ENH, 10%), Kogas (10%) and Galp Energia (10%).

The agreed price is equal to 4,210 million US dollars.

The completion of the transaction is subject to the fulfillment of certain standard conditions including obtaining all necessary authorizations from Mozambique’s authorities.

CNPC’s entrance into Area 4 is strategically important for the project thanks to the worldwide relevance of the new partner in the upstream and downstream sectors.

During the meeting, Eni and CNPC signed a Joint Study Agreement for cooperation for the development of the Rongchang shale gas block, which covers about 2,000 square kilometers in the Sichuan Basin. This area, closely located to the main consumption markets in China, has already been de-risked by research activities and production tests carried out in nearby blocks and has proven to be the most promising in the country to date.

The agreement will allow for the study of the area which will be conducted simultaneously with the negotiations for the signing of the Production Sharing Agreement.

* Huntsman Corporation (NYSE: HUN) announced that it has acquired a 20% stake in Nippon Aqua Co. Ltd. (Nippon Aqua), a spray polyurethane foam (SPF) insulation company based in Yokohama, Japan, and that it has entered into a 10 year supply agreement with the company. The financial terms of the deal were not disclosed.

Nippon Aqua is the SPF market leader in Japan, with business operations in over 30 locations across the country, and is a subsidiary of leading residential home builder Hinokiya Holdings Co. Ltd. Huntsman supplies various advanced MDI-based polyurethanes systems to Nippon Aqua.

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