Laporte's pounds 1.5bn deal founders on Hoechst veto
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.LAPORTE, the UK fine chemicals group, was yesterday forced to scrap plans for a pounds 1.5bn takeover by the chemical giant Clariant after strong opposition from Hoechst, the Swiss group's largest shareholder.
The British group baffled the City when it said that talks with a potential bidder had ended, less than 24 hours after admitting it was discussing an offer. The collapse sent Laporte shares crashing 12.5 per cent to 667.5p.
Sources close to the deal said the embarrassing U-turn was prompted by Hoechst's last-minute opposition. The German chemicals and pharmaceutical group, which holds 45 per cent of Clariant, is believed to have vetoed the deal at a meeting with the two companies on Monday night. The German company was concerned that a Clariant-Laporte deal might jeopardise its own merger with Rhone-Poulenc of France. Hoechst needs to sell its chemical businesses, including its stake in Clariant, before merging with Rhone- Poulenc, and was worried that corporate action by Clariant might delay the process.
Industry sources said Hoechst could also have hesitated at the prospect of financing part of the Laporte deal as Clariant was likely to add to its $1.9bn (pounds 1.2bn) debt to fund the takeover.
"It was a done deal, they went for agreement from Hoechst and they were refused," one insider said. Another source said the deal cleared all relevant hurdles before foundering on Hoechst's concerns. "This is not about price, nor management, personalities, strategy, due diligence or competition issues," he said.
Analysts said the collapse of the takeover was a huge embarrassment both for Clariant and Laporte's chief executive, Jim Leng. They said the demise of the deal would prompt other chemicals groups to bid for the UK company. "Laporte is in play now. The fact that they were willing to agree a takeover means they are now up for sale," said one analyst.
Industry experts said the US group PPG and some European players, including Viag and Degussa-Hels of Germany, could enter the fray.
This is the second setback in four months for Clariant's expansion plans. Last year the group dropped plans for a $8.1bn merger with Swiss rival Ciba Speciality Chemicals.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments