Reliance Bid For LyondellBasell To Kick-Start M&A Activity

Now that both Reliance Industries and LyondellBasell have confirmed that an offer has been made for the world's 4th largest chemical company, we can anticipate a significant increase in M&A activity in the chemical industry.

Some industry analysts believe that the reported price, of somewhere between $10M - $12M, is relatively low, given LyondellBasell's recently published EBITDA results and could initiate a bidding war involving a number of prospective suitors.

The news follows hot on the heels of the various reports that IPIC is in talks with as many as 5 potential targets, including Bayer MaterialScience and other companies possessing technologies technologies which would support the development of the ChemaWEyaat project in Abu Dhabi.

There have also been reports that Dow Chemical has been in talks regarding the sale of a number of assets, as well as reports that Sinopec was looking at a number of potential targets in Europe. I've also heard several suggestions that a number of the Middle East majors will be looking to complete further acquisitions in 2010.

It looks certain that 2010 will be a major year of change in the sector, with the emergence of some new superpowers in the industry and further consequent changes to the asset footprint. Time for the site people to start changing the signposts and the letterheads once again!

Bayer Outlines Energy Saving Measures

photo : Dimplex

Bayer MaterialScience has taken a very proactive stance in highlighting a number of the measures that it is taking to meet its goal of cutting specific greenhouse gas emissions per ton of product sold by 25% by 2020.

To achieve this target, Bayer has announced the following steps

• Implementation of a novel energy management system to cut energy use  throught its manufacturing and supply chain. In particular the company aims to reduce consumption at its 60 most energy-intensive sites 10% by 2012
• Introduction of a new chlorine production process, with the highly energy-efficient oxygen-depolarised cathode process (uses 30% less electricity than equivalent processes)
• Developing and implementing a new approach for supplying materials and technologies for energy-efficient housing
• Designing several company buildings to be ultra-efficient, using significantly less energy than buildings of an equivalent size

This blog has posted several times on the question of anthropogenic global warming. However, whilst this particular debate will rage well beyond Copenhagen, the case for a sustainable approach to business is absolutely clear.

Bayer's approach is to be applauded and makes great business sense, in terms of company image, in terms of sustainability and in terms of long term energy cost saving