ASIAN SPECIALTY CHEMICALS NEWSLETTER JUNE 2009, ISSUE 59 A Quarterly newsletter of developments in the chemicals industry CONTENTS We hope you find the Asian Specialty If you think that BDA’s services may be C hina .......................... 1 Chemicals Newsletter informative. useful to you, please contact us at any one I N D ia ........................... 4 of our offices or email me at erellie@bdallc. I N DO nesia .................... 4 BDA is an investment banking advisory com. Contact details for our offices are at firm which assists multinational clients to the back of this newsletter. We look forward J apan .......................... 4 identify, assess and execute cross-border to speaking with you in the future. KO rea .......................... 5 transactions involving Asia, including taiwan ........................ 5 acquisitions, divestments, JVs, capital thailan D ...................... 5 raising, and restructuring. We have offices Euan Rellie, Senior Managing Director V ietnam ....................... 6 and professional staff throughout Asia, the [email protected] Middle East, the US, and Europe. China Chemical Sector Stock Indices (12 months ending 23Jun09) Chem Index Chart 1 China Blue Chemical Ltd, a Chinese nitrogenous fertilizer company, has acquired 83.2% of Hubei Dayukou 120 Chemical Co (“DYK”) and 100% of ZHJ Mining Co (“ZHJ”) from China National Offshore Oil Corp for US$184m. The 100 acquisition will allow China Blue Chemical to start phosphate ore mining and 80 China produce phosphate-based fertilizers, Japan and thus develop its phosphate fertilizer Korea EU and phosphoric chemical business. 60 US March 30, 2009 40 Bio-Bridge Science Inc, a biotechnology company that develops of vaccines and vaccine-related products announced 20 Jun-08 Aug-08 Oct-08 Dec-08 Feb-09 Apr-09 Jun-09 that its wholly-owned subsidiary, Bio- Bridge Science (HK) Co has entered into a JV with JR Scientific Inc, a US-based Source: Bloomberg, BDA * Note: No chemical index available for India Page 1 2 AS I A N S PE ci A L T Y C H E M ic ALS NEWSLETTER J UNE 2009, ISSUE 59 reagents. The transaction will involve Specialty Chemicals P/R Ratios for Selected Countryies (23Jun09) the issuance of 6.6 million fully paid ordinary CBI shares to the shareholders of GL Biochem, representing 51% of 1.8x 1.7x CBI’s outstanding share capital. As 1.6x part of the transaction, GL Biochem will grant CBI an unencumbered option to 1.4x purchase all the issued capital of three related businesses, namely GL Biochem 1.2x (Danyang) Ltd, GL Peptide (Shanghai) Ltd 1.0x and GL Peptide (Binhai) Ltd (collectively, the “Associated Companies”) within 0.8x twelve months of the closing of the 0.6x transaction (the “Option”). The purchase 0.6x 0.5x price of the Option will range between 0.4x 0.4x 0.4x 0.3x 8.14 million shares and 18.64 million CBI shares, based on the forthcoming 0.2x 2008 audited after-tax profit results of GL Biochem and Associated Companies. 0.0x June 9, 2009 China India Japan Korea US EU Source: Bloomberg, BDA Dragon Boom Investments Ltd, a subsidiary of China Zenith Chemical manufacturer of classical and custom Inc has agreed to acquire all of the Group Ltd, has agreed to acquire a stake cell culture medium and sera products outstanding shares of a privately in Racing Dragon Group Ltd from Time (“JRS”) and several other investors, to owned Shanghai-based chemical Boost Holdings Ltd. All the companies form a new cell culture medium JV in company and the largest supplier involved in the transaction are based in Beijing. The registered capital of the of research-grade peptide products British Virgin Islands. Racing Dragon is an JV will be US$15m. July 1, 2009 and peptide reagents globally. The investment holding company that owns acquired company has demonstrated industrial land, China Zenith Chemical Lanxess AG, a German specialty compound annual revenue growth produces coal-related chemical and bio- chemicals company, has acquired of over 40% over the past five years, chemical products. Dragon Boom will Jiangsu Polyols Chemical Co (“PCC”), and reported 2008 revenues of over acquire 55% of the issued share capital of a polyol producer serving China’s US$13m and net income after tax of Racing Dragon for US$10m. June 1, 2009 lubricants, paints, coatings and US$2m. July 4, 2009 printing as well feed additives markets. Hoe Seng, a Singapore-based rice Financial details of the transaction Commonwealth Biotechnologies, a products company, has acquired the were not disclosed. June 26, 2009 US-based provider of R&D products Guangdong-based ceramic opacifiers and services, has agreed to acquire GL and polyester resin catalysts activities Venturepharm Laboratories Ltd’s Biochem, a Shanghai-based chemical of Arkema Group SA, the listed French NASDAQ-listed flagship company, company and supplier of research- manufacturer of chemical products, Commonwealth Biotechnologies grade peptide products and peptide for an undisclosed consideration. The 3 AS I A N S PE ci A L T Y C H E M ic ALS NEWSLETTER J UNE 2009, ISSUE 59 operations employed 115 people and Specialty Chemicals Trading Multiples for Selected Countries (23Jun2009) recorded 2008 revenues of $18m. Arkema was advised by BDA, and the divestment will enable it to focus on the development of core business segments. May 4, 2009 35.0x 31.5x Mitsubishi Rayon will acquire Lucite 30.0x International for US$1.6bn, creating an 25.0x entity with a 64% share of the Chinese 20.3x market for methyl methacrylate (“MMA”), 20.0x much bigger than the market shares of the second- and third-biggest suppliers, 15.0x 11.7x 11.9x Jilin Petrochemical and Heilongjiang 9.4x 9.7x 10.0x 8.1x 7.5x 7.2x Longxin Chemical Co. China’s Ministry 6.2x 5.8x of Commerce (“MOFCOM”) has given 5.0x 4.0x conditional approval, but has said this merger would diminish competition in 0.0x China’s MMA market. MOFCOM and China India Japan Korea US EU Mitsubishi Rayon have, as a result, EV/EBITDA P/E agreed that Lucite’s Chinese subsidiary Source: Bloomberg, BDA will give up the rights to 50% of its annual production to one or several third-party buyers. The arrangement will be effective shareholders including China Huayou, chemical company, has agreed to acquire for five years following completion of China Petroleum Pipeline Bureau, and a synthesis gas catalyst manufacturing Mitsubishi Rayon’s acquisition of Lucite. China National Petroleum Corp for facility in Nanjing, China from BASF, May 28, 2009 $160m. The transaction is expected to a German chemical company, for be completed by December 31, 2009. an undisclosed consideration. The PetroChina, a Chinese oil and gas May 18, 2009 manufacturing facility has 400 employees producer, has acquired 45.5% of and produces more than 30 different Singapore Petroleum Co for US$1bn and Sinopec, the Chinese petroleum refiner, types of syngas catalysts. The transaction plans to make an offer for the company’s has agreed to acquire Addax Petroleum, reflects Sud-Chemie’s expansion strategy remaining shares. The transaction, when a Canadian oil and gas exploration in the Chinese synthesis gas catalyst completed, will trigger a general offer company, for US$7.2bn. The deal market. April 20, 2009 for the remaining shares. PetroChina follows PetroChina’s agreement in and Keppel Corp have also agreed to May 2009 to buy Singapore Petroleum Praxair, a US-based manufacturer of cooperate in offshore oil platforms. May for US$2.3bn and CNOOC’s oilfield- industrial, process and speciality gases, 25, 2009 services arm’s acquisition of Norway’s has announced that its wholly-owned Awilco Offshore in July 2008 for subsidiary, Praxair (China) Investment PetroChina Kunlun Gas, a subsidiary US$2.5bn. June 24, 2009 Co has set up a JV in Guangzhou, with of Petro China, has agreed to acquire Sinopec, the Chinese petroleum refiner. the City Gas Business from multiple Sud-Chemie AG, a German speciality The JV, Praxair-GPC Industrial Gases Co, 4 AS I A N S PE ci A L T Y C H E M ic ALS NEWSLETTER J UNE 2009, ISSUE 59 will produce, sell and distribute industrial has offered to acquire an additional which was founded in 2006, is located in gases such as oxygen, nitrogen, and 20% of Ciba India, an Indian chemical Liyang, west of Shanghai. June 10, 2009 argon for a wide range of industrial company, at USD$4.9 a piece. Earlier applications. The JV will also meet in April 2009, BASF SE had acquired a Reliance Industries Ltd (“RIL”) has the demands of Sinopec for a quality, controlling stake in Ciba Holding AG, the bought back the entire 5% stake in reliable nitrogen supply. The venture is Switzerland-based parent of Ciba India, Reliance Petroleum Ltd (“RPL”) held by expected to start operations in Q4 2009. which triggered a 20% open offer for Ciba Chevron India Holdings for US$280m. Financial details of the transaction were India. BASF now holds 95.8% of Ciba The acquisition has increased RIL’s not disclosed. May 5, 2009 Holding AG. April 13, 2009 holding in RPL to 75.4%. May 1, 2009 Sinopec, the Chinese petroleum refiner, Cognis, a German supplier of ingredients Indonesia has secured supplies of crude oil via for personal and home care products, a $10bn loans-for-oil agreement with agriculture, coatings, lubricants, food UNIPOL(TM) Polypropylene Process Brazil’s Petrobras. The deal will help ingredients, pharmaceuticals, and dietary Technology from Dow Basic Plastics, guarantee supply for Sinopec, which supplements, has opened an affiliate in a subsidiary of US-based Dow produces only 20% of the oil it needs.