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Source: Reuters
Clarinet announced Thursday that it has decided, with Saudi Basic Industries Corporation (SABIC), its largest shareholder, to suspend negotiations on a joint venture, resulting in a 10% decline in Swiss Chemical Industries.
The company, whose CEO abruptly resigned this week, also suffered a loss in the first half, penalized by the provision of provisions for a European survey of competitive practices.
Colorants include dyes, additives and special effect concentrates of plastics used in certain products, such as packaging.
"Given the current market situation, both parties decided that it was in the interests of the shareholders of both companies to temporarily suspend the negotiations," said Mr. Clarent.
The company's director, Ernesto Ocello, resigned unexpectedly this week, 10 months after joining SABIC.
The Swiss company said it was looking to sell its special dyes and other badets currently on sale.
Clarent plans to use the proceeds of the investments to pay SABIC the badets it will develop as part of the joint venture. But now says that the money from the extended outings will go to investments in technology, budget and shareholders.
"It's a mess," said Markus Meyer, an badyst at Bader Helvia's Chemical Division.
"SABIC is interested in the complete acquisition of Clarent and, with the resignation of SABIC's general manager, Ocello, and the cancellation of the joint venture negotiations, we believe that it takes time before that SABIC is offering an offer of acquisition, "he said.
Meyer said the joint venture was considered one of the growth drivers of the Swiss company.
SABIC's market capitalization is $ 88 billion, 13 times higher than Clarent's market capitalization of $ 6.66 billion.
Market conditions
SABIC confirmed the suspension of negotiations but said in a statement that she "looks forward to the resumption of negotiations with Clarent as soon as the situation improves".
Earlier this year, Saudi Aramco signed an agreement with the state-run Public Investment Fund to acquire a controlling stake in SABIC for $ 69.1 billion.
"Market conditions could be one of the reasons for the suspension of the joint venture, given the low prices of petrochemicals in the world, which have hurt the sector's results," said Mazen Al Sudairi, director of research at Al Rajhi Capital.
"Whenever there are concerns or changes regarding the business cycle, mergers and acquisitions should be suspended," said Mr. Sudairy. SABIC learned this lesson by following the acquisition of a GE unit in 2007 for $ 8 billion as part of a major mortgage crisis, he said.
SABIC bought its stake in Clarent in 2018 to become the savior who ended the battle of the Swiss company with active investors who had blocked a potential $ 20 billion merger with US-based Huntsman.
Clarent announced Thursday a net loss of 101 million Swiss francs (102.56 million dollars), against 211 million francs a year earlier. Sales amounted to CHF 2.2 billion.
The results were affected by the provision of 231 million francs for clarinet as part of an ongoing competition law investigation by the European Commission.
"It must be recognized that the first half of 2019 was difficult, especially in the second quarter, which was also affected by temporary adverse effects and non-recurring events," said Clarent Harilov-Kutman, chairman of the board. Clarent's administration.
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