BASF: A Cyclic Stock Offers Opportunities In A Volatile Market
Seeking Early Retirement
Seeking Early Retirement
BASF Continues To Execute A Proven Plan
Stephen Simpson, CFA
Stephen Simpson, CFA
BASF Has Lagged On A Relative Basis, But Excels On Its Own Merits
Stephen Simpson, CFA
Stephen Simpson, CFA
Wed, Jun. 22, 3:35 PM
- Aspen Aerogels (ASPN +22.1%) pops 22% on news of an expanded strategic partnership with BASF (OTCQX:BASFY +0.9%), which includes a commitment to the exclusive supply of its Spaceloft A2 product for incorporation within BASF's aerogel enhanced slentex wall system.
- BASF agrees to make a low double-digit million investment toward the construction of ASPN's new manufacturing plant and provide technical support in targeting manufacturing productivity, product cost and profit margins.
- BASF says the agreement, which will run through 2027, paves the way for the two companies to develop new aerogel products and technologies.
Thu, May 19, 11:48 AM
- A Monsanto (MON +4.9%) takeover by Bayer is considered "relatively unlikely" by Jefferies analyst Laurence Alexander, as he expects MON to object to the offer given its conviction in its R&D pipeline and longer-term competitive advantages.
- Alexander thinks shares of Syngenta (SYT -0.5%) and DuPont (DD -0.7%) could be pressured as regulatory scrutiny likely would intensify if MON gets acquired, and BASF (OTCQX:BASFY -1.4%) could fall on investor concerns of a potential counter-bid.
- But the analyst sees a potential MON takeover as positive for shares of Novozymes (OTCPK:NVZMY -0.1%) and FMC Corp. (FMC -0.7%), as "a further roll-up of 'specialty generic' agrichemical assets could entice capital, and FMC would be a plausible anchor for such an attempt."
- Jefferies rates MON as a Hold with a $95 price target.
- Now read Bayer investor "deeply concerned" about move for Monsanto
Thu, May 12, 3:37 PM
- Monsanto (MON +8.5%) remains sharply higher though off highs of the day, following headlines that Bayer (OTCPK:BAYRY -4.1%) and BASF (OTCQX:BASFY -1.7%) are considering a possible acquisition of the company.
- Financial Times reports that MON is interested in forming some sort of combination with the agrochemical businesses of either of the two companies but opposes any deal that would turn it into a division of a German company.
- Piper Jaffray analysts say the interest in acquiring MON is mere speculation, seeing a potential joint venture as a more likely outcome as "we believe Monsanto remains committed to building a chemistry business."
- J.P. Morgan believes Bayer would need to raise equity given the size of the deal, and thinks Bayer investors likely would be only lukewarm around the potential deal given limited accretion and investor desire for Bayer to strength its pharma pipeline following recent setbacks.
- Analysts say a MON takeover likely would draw intense scrutiny from global regulators already confronting an unprecedented wave of consolidation in the crop chemicals industry involving the likes of Dow Chemical (DOW +0.8%), DuPont (DD +0.2%) and Syngenta (SYT +0.4%).
- Now read Seed war sparked: Bayer and BASF to battle over Monsanto?
Thu, May 12, 8:13 AM
- Monsanto (NYSE:MON) now +17.7% premarket as Bloomberg reports that Bayer (OTCPK:BAYZF, OTCPK:BAYRY) is exploring a $40B takeover bid for the company.
- Bayer has held preliminary discussions internally and with advisers about how to finance a deal, including potential asset sales, according to the report.
- MON already was moving higher after StreetInsider reported interest in the company from BASF (OTCQX:BASFY).
- A deal would create the world’s largest supplier of seeds and farm chemicals, and boost Bayer and MON amid a wave of consolidation in the industry after Dow Chemical and DuPont announced last year plans to combine operations in a $130B deal while ChemChina agreed in February to buy Syngenta for $43B.
Thu, May 12, 6:56 AM
Wed, Mar. 23, 12:47 PM
- The chemicals industry is on the verge of an "M&A bonanza," driven by strong balance sheets, cheap financing and activist pressures, Deutsche Bank says following a week-long series of meetings with leading U.S. and European chemical companies.
- Deutsche Bank sees the U.S. Gulf coast region as the top global investment region looking ahead, and says North American ethane based ethylene production still maintains a 50%-60% cash cost advantage over European production even though the collapse in oil price has flattened the cost curve.
- Among U.S. majors, the firm maintains Buy ratings on Celanese (CE -1.3%), Dow Chemical (DOW +0.6%), DuPont (DD +0.8%), Eastman Chemical (EMN +0.1%) and PPG Industries (PPG -0.3%); Evonik (OTC:EVKIF), BASF (OTCQX:BASFY) and Linde (OTCPK:LNAGF) are viewed as top potential European buyers of U.S. assets.
Tue, Mar. 8, 10:23 AM
- American Superconductor (AMSC +7%) is partnering with chemicals/materials giant BASF (OTCQX:BASFY) to "jointly develop an advanced low cost manufacturing process for second generation high temperature superconductor wire."
- AMSC: "In the joint development, AMSC’s manufacturing know-how for its Amperium® superconductor wire and BASF’s chemical solution deposition production technology will be combined. As part of the agreements, AMSC and BASF also entered into a royalty-bearing, non-exclusive license under which AMSC will provide BASF a specified portion of AMSC’s second generation (2G) high temperature superconductor (HTS) wire manufacturing technology."
- The agreements are expected to "result in the development of a potentially low cost manufacturing process at BASF and to enable AMSC to focus resources on driving down the total system cost." If all goes well, AMSC will be able to use wire produced by the manufacturing process in its HTS systems business.
Fri, Mar. 4, 4:38 PM
- DuPont (NYSE:DD) +5.2% AH following a Bloomberg report that BASF (OTCQX:BASFY) is considering a rival takeover bid for the company.
- BASF is working with advisers and banks to examine the merits of making a counter bid for DuPont, which has agreed to a merger with Dow Chemical (NYSE:DOW), according to the report.
- BASF is said to have held talks with DuPont before the merger agreement with Dow, but the talks did not progress.
Dec. 9, 2015, 12:10 PM
- Any merger between Dow Chemical (DOW +10.5%) and DuPont (DD +12.6%) would have far-reaching consequences for European rivals, prompting a series of moves as pesticide and seed makers scramble to face a combined U.S. giant.
- A merger would make it more likely that Monsanto (MON +0.2%) re-approaches Syngenta (SYT +7.7%), Bernstein analysts say, speculating that a new bid could come in at 485 Swiss francs, more than the 470 cash-and-stock offer withdrawn in August.
- The pressure on MON to defend its position as the biggest seeds player would be "huge" as chemical companies will want to defend or even strengthen their market positions, says MM Warburg's Oliver Schwarz.
- Regulatory hurdles to a merger would require the combined company to sell off some businesses, likely sparking interest from contenders such as BASF (OTCQX:BASFY -0.1%), Schwarz says. “All the big companies that are swimming in this pond would probably be interested in taking over assets that Dow or DuPont would sell."
Nov. 10, 2015, 10:02 AM
- BASF (OTCQX:BASFY -2.2%) unveils plans to reorganize its paper, water, oilfield and mining businesses within its performance chemicals division, in the latest move by CEO Kurt Bock to streamline the company’s sprawling portfolio.
- BASF says the creation of two new business units - to be called paper and water, and oilfield and mining solutions - will result in ~120 job cuts globally by the end of 2016.
- Six years after BASF acquired Ciba for $5B, Bock continues to restructure the company's under-performing performance products division, which already has seen more than 4,500 job cuts and 35 plant closures.
Oct. 27, 2015, 10:17 AM
- Net profit of €1.2B, compared with €1.01B for the same period last year, largely driven by gains from the recent asset swap with Gazprom. EBIT before one-time items fell 10% to €1.6B.
- Sales dropped 5% to €17.4B, hurt by weakness at its basic chemicals division and economic slowdown in China.
- Citing soft growth in the emerging markets, BASF (OTCQX:BASFY -5.3%) lowered its full-year earnings guidance, and now expects a "slight decrease" in EBIT before special items compared with 2014.
Sep. 28, 2015, 12:58 PM
- Huntsman (HUN -23.8%) plunges by nearly 25% following an earnings warning from the company after Friday's market close that lower titanium dioxide pricing, currency headwinds, soft demand in Asia, lower oil prices and a delay in benefits from lower raw material prices will negatively impact Q3 earnings.
- HUN says it also sees lower margins for methyl tertiary butyl ether due to lower oil prices and forecast continued lower MDI urethane component product margins in the Asia Pacific region.
- CEO Peter Huntsman says he is "optimistic about the future" despite the short-term headwinds, and that the company anticipates Q4 adjusted EBITDA similar to Q3 at ~$300M, similar to last year's level; HUN also remains committed to a separation of the pigments and additives business by year-end 2016 or sooner.
- Other chemical companies also are lower: DOW -2.7%, DD -1.7%, EMN -4%, ASH -4.3%, CC -7.6%, KRO -1%, SHLM -3.1%, LYB -4.1%, SSL -4%, OTCQX:BASFY -1.3%.
Jun. 3, 2015, 12:55 PM
- BASF (OTCQX:BASFY) is considering a potential offer for Syngenta (SYT +4.4%), and is speaking to investment bankers about the possibility of an offer, according to a Reuters report.
- SYT so far has spurned a $45B takeover offer from Monsanto (MON -0.3%), but lawyers representing the two companies reportedly have met to discuss whether regulatory obstacles can be overcome.
May 14, 2015, 3:05 PM
- Monsanto (MON +1.7%) is trying to line up buyers for assets worth up to $8B to appease regulators before making a new takeover approach for Syngenta (SYT +1.7%), possibly within three weeks, Reuters reports, citing industry sources.
- MON reportedly will tap Germany's BASF (OTCQX:BASFY, OTCPK:BFFAF), an existing joint venture partner, as it seeks a buyer for SYT's U.S. seeds business, which cannot be part of its proposed takeover.
- SYT's seeds business could be worth $6B-$8B, and likely would need to be sold because authorities are expected to block MON from adding to its dominance of the U.S. soy and corn seeds market.
Apr. 30, 2015, 4:55 PM
- Syngenta (NYSE:SYT) +12.6% AH after Bloomberg reports it has been approached by Monsanto (NYSE:MON) about a possible takeover.
- Combined with SYT, MON would become the largest player in the world for both seeds and crop chemicals and a formidable competitor to Bayer (OTCPK:BAYZF, OTCPK:BAYRY), BASF (OTCQX:BASFY, OTCPK:BFFAF) and Dow Chemical (NYSE:DOW).
- Reports last year had said the companies held preliminary talks with advisers about a combination before SYT management decided against negotiations.
Sep. 20, 2013, 7:40 AM
At BASF, we create chemistry and have been doing so for 150 years. Our portfolio ranges from chemicals, plastics, performance products and crop protection products to oil and gas. As the world's leading chemical company, we combine economic success with environmental protection and social... More
Sector: Industrial Goods
Industry: Chemicals - Major Diversified
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