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Thailand PTT Global Chemical Pcl will acquire Allnex Holding GmbH, a European manufacturer of specialty chemicals, for € 4 billion ($ 4.75 billion) to expand its presence in high value-added chemicals. Shares of PTT Global have fallen the most in over a year.
PTT Global will acquire 100% of the ordinary shares of Allnex Holding for 132.6 billion baht, or 3.58 billion euros, and will also assume 426 million euros in loans, he announced on Monday in a statement. exchange document. The company will finance the acquisition with its own cash and with the support of its parent company PTT Pcl, he said.
“PTT Global has so much excess liquidity that would help fund their expansion and aggressive acquisitions,” said Naphat Chantaraserekul, analyst at Krungsri Securities Co. “Acquisition cost appears high based on our review of recent Allnex earnings . “
PTT Global fell 7.3% to 54.25 baht in Bangkok trading, the biggest intraday decline since June 2020. Shares of PTT, Thailand’s largest company by market value, rose 0.7 %.
PTT Global and its main local competitors – Indorama Ventures Pcl and Siam Cement Pcl – has stepped up acquisitions and overseas investments in recent years to expand production of chemical materials used for plastic packaging, bottles and other products. PTT Global’s purchase of Allnex will be the largest overseas acquisition by a Thai company since the acquisition of Fraser and Neave Ltd. by Thai Beverage Pcl in 2012, according to data compiled by Bloomberg.
Profit seeking
Global refiners have been make forays into the plastics and specialty chemicals sectors in search of better profit margins. With the increasing electrification of cars and the slowing growth in demand for oil, more and more fuel producers in China and India is also focusing on petrochemicals rather than gasoline and diesel.
See also: Global oil refining faces upheaval in Asian plastics boom
Petrochemicals are expected to be the main source of growth in oil demand in the medium term, eclipsing an increase in the consumption of transport fuels, according to the International Energy Agency. Demand for raw materials used to make petrochemicals – namely ethane, liquefied petroleum gas and naphtha – is expected to increase until 2026, he writes in a report.
PTT Global expects to complete the Allnex transaction in December. The company has signed an agreement with PTT, the state-controlled energy giant, for up to 73.9 billion baht in loans to finance its investment in high-value companies, he said. declared in another declaration. The 2-year loan will have an interest rate of up to 2.5% per year, he said.
The company’s cash and new loans will be sufficient for the acquisition of Allnex Holding, PTT Global said in a statement. separate statement, adding that he will not seek to sell new shares to finance the purchase.
– With the help of Serene Cheong
(Add company statement on financing in last paragraph.)
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