Industrial M&A Monthly Updates – Apr18

OIL & GAS COMPANIES

On April 8thSaudi Aramco signed agreements with Honeywell UOP and Technip FMC taking the first steps toward expanding the most significant US refinery. The company is considering building a multi-billion-dollar chemical plant at the Port Arthur refinery. The final investment decision is not expected until 2019.

Saudi Aramco and Petronas have formed two joint ventures to further the operations of the refinery and petrochemical integrated development (RAPID) project now under construction at the $27 billion Pengerang integrated complex (PIC) in southeastern Malaysia. As part the agreement, Aramco will hold a 50% ownership interest in RAPID ventures and assets. It will also supply 70% of required crude feedstock for the refinery, while Petronas and its affiliates will provide natural gas, power, and other utilities.

On April 30thMarathon Petroleum Corp is set to buy Andeavor for more than USD 20 billion, in an operation that would create the largest US refiner by capacity, processing about 3.1 million barrels per day. The potential cash-and-stock deal values Andeavor at about USD 150 per share. The offer would represent a premium of 22.6 percent on Andeavor original stock.

BP and Petrobras have signed a memorandum of understanding to explore potential joint commercial agreements in areas of mutual interest in upstream, downstream, trading, and across low-carbon initiatives, inside and outside of Brazil. The alliance is expected to include technology transfer, joint training, and research. BP and Petrobras are partners in 16 exploration blocks in Brazil. Both are members of the Oil & Gas Climate Initiative.

Danish drilling rig operator Maersk Drilling is set to establish a 50:50 joint venture with Copenhagen-based Maersk Supply Service, an offshore marine service. The new joint venture will provide end-to-end decommissioning services, including project management, and will initially cover up to 80% of the decommissioning process. Under the deal, Maersk Drilling and Maersk Supply Service will invest equally in the JV company, with an initial investment of approximately $20m.

On April 20th, Rex International Holding, a Singapore-based exploration and production company, together with its subsidiaries, disposed of its 30.29% stake represented by 13,858,871 shares in Norwegian oil and gas company FRAM Exploration. The sale was made to Makli Invest, an investment company based in Norway, for a nominal price of $1 per share.

On April 6thAnton Oilfield Services and Petrofac signed a two-year contract with the Iraqi Oil Ministry to operate in the country’s giant Majnoon oilfields, taking over operations from Royal Dutch Shell. The plan is to boost oil output, from 240,000 to 450,000 barrels per day, by adding new production platforms.

 

EPC CONTRACTORS

Norwegian GCE Subsea has welcomed Aker BP as its new partner. Through this partnership, Aker BP has gained access to an arena where they can meet potential customers and partners, and where valuable knowledge and know-how is shared and transferred to partners and members. Aker BP is continuing to focus on building relations with the Oceans Industries Incubator with the hope that this will prove to be a useful arena for innovation relevant to their value chain.

In an attempt to stop a planned combination between CB&I and McDermott, Norwegian offshore oil services firm Subsea 7 is open to potentially sweetening its original $2 billion offer for McDermott. It is expected however, that its investors will support the initiative while the new offer will reject Subsea’s proposal. In fact, it is still not clear whether the company is willing to pay more than the $7 per share rejected by McDermott’s board on April 20th. Subsea 7 insisted its proposal is subject to the termination of McDermott’s planned transaction with CB&I.

 

CHEMICAL AND STEEL & METALS

The steel 50:50 joint venture between Thyssenkrupp and Tata Steel will be delayed by ongoing talks between the Indian group and its British and Dutch workers. Boards at both companies are expected to decide by the end of June. The groups had previously aimed to sign the deal at the beginning of 2018. Now, the merger could be delayed into 2019. Synergies are expected to be around 400-600m euros per year through reduction of costs and efficiency in downstream operations.

Italmatch Chemicals Group signed an agreement to acquire the metalworking fluid business (known as Polartech) from Afton Chemical. Italmatch Chemicals Group will increase its product range with a series of fluid additives for high-performance metal processing.

 

COMPONENTS MANUFACTURERS

On April 1st, Sulzer announced an expansion of 12 000 m2 more manufacturing space on the GEKA site, located in Bechhofen, Germany, a move which will create 250 new jobs at the site. The move comes as the company has seen significant growth in the market over the past two years.

South Korea’s Hyosung Group and Taihan Electric Wire Co. will cooperate on developing an integrated electric power station management solution. They will turn electric power stations “smart” utilizing some of the latest technologies, such as the Internet of Things and big data analytics solutions. Under the contract, they will develop an intelligent electricity cable system that monitors and detects any possible malfunctioning.

On April 12thPunj LloydRave Gears and Adani Group announced an intention to collaborate for the design, manufacture and assembly of high precision gears and transmission systems for rotary platforms.

On April 10thNavantia Australia signed a memorandum of understanding with Hofmann Engineering to support the Royal Australian Navy’s SEA5000 Future Frigate programme, worth $25bn. Navantia will bring technologies to Australia and develop them locally in a significant step forward for the development of a local sovereign industry. Navantia claims to have identified more than 300 Australian companies to help deliver the capabilities required for the programme.

Swiss pump-maker Sulzer received the second license fully unblocking its assets after last week was freed from U.S. sanctions related to its Russian investor Viktor Vekselberg. Authorities approved Sulzer’s buyback of shares which reduced Vekselberg’s stake to less than 50%.

On April 18th, Mapei, an Italian company operating in the production of adhesives, sealants and chemical products for the building industry, acquired 100% of the Modena-based company Fili & Forme, which produces synthetic monofilaments in PVC and PP as well as structural polymeric fibres for fibre-reinforced concretes. This will allow Mapei to benefit from an essential component in the production of reinforced mortars and to consolidate the position of the Mapei group in this sector.

 

 

SERVICE PROVIDERS

On April 30th, a new global oil and gas decommissioning consortium offering an ‘end-to-end’ collaborative supply chain approach, with members including Lloyd’s Register (LR)WorleyParsons and Ardent, has been announced. The consortium’s services will cover all aspects of decommissioning, from late life management to planning, readiness for removal, execution, waste management and monitoring post removal.

Listed Australian company WorleyParsons announced on April 11th the strategic acquisition of the Ludwigshafen and Schwarzheide offices of the M+W Group in Germany. WorleyParsons’ current operations in Ludwigshafen and the newly acquired offices will be combined into a single business. Approximately 50 staff are employed in the acquired offices. The acquisition represents another step in WorleyParsons’ strategic growth objective of establishing a strong presence in the European chemicals sector.

Danish consultancy and engineering group Ramboll has taken over DEG Signal. All of DEG Signal’s staff will remain at its Wiltshire headquarters as it becomes the centre of Ramboll’s UK operations.

On April 15thAT Kearney’s managing partner and chairman said that the US-based consultancy is looking to solidify and expand its footprint in the Middle East and is open to acquisitions or partnerships to serve its regional clients better.

On April 10thFirst Reserve, a leading global private equity investment firm focused on energy, announced the acquisition of CHA Consulting from Long Point Capital. CHA is a highly diversified, engineering firm with a team of over 1,000 employees. It operates across a variety of end markets including energy, industrial, environmental, transportation, facilities and water, providing engineering and consulting services.

On the 24th of April the acquisition by HIS Markit, a British data, analytics and solution provider, of DeriveXperts, a valuation services vendor for over-the-counter (OTC) derivates, became official. Thanks to this move, Markit will enter into crucial equity derivates and other equity-linked products markets.

Mexico’s public administration ministry has banned two subsidiaries of Brazilian company Odebrecht from inking contracts with state-owned firms and public entities for 30 months. The decision has come after a suspicious involvement of Odebrecht in corrupt dealings with Pemex, the former Mexican oil monopolist.

 

RENEWABLES

Italy’s Enel has decided to sweeten its bid for Eletropaulo Metropolitana Eletricidade de Sao Paulo, increasing it to just above a rival offer from a Brazilian unit of Spain’s Iberdrola.

Dutch offshore contractor Van Oord has sold its 10% stake in the 600-MW Gemini offshore wind farm near the Dutch coast for an undisclosed sum.

 

DIGITAL

On April 24thToshiba Digital Solutions Corporation and Nebbiolo Technologies Inc. signed a strategic partnership agreement to deploy industrial IoT solutions using leading-edge fog computing technology. A complete suite of infrastructure products will be developed driving new business supporting industrial IoT architecture and specifications. The partnership establishes an initiative in the factory IoT domain to address modernising the ageing fleet of hardware and software currently deployed.

On April 19thEmerson and AspenTech announced they have teamed up to deliver asset optimisation software solutions along with global automation technologies and operational consulting services. Together, the two companies will help customers optimise production and drive operational excellence.

On April 16th, temporary power generation equipment and of temperature control equipment Aggreko, in line with its strategy to reduce the cost of energy for its customers, has acquired a 14% share of Origami Energy, a software platform developer. Origami Energy uses smart technology to help customers realise the full revenue potential of their energy assets.

 

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