66
Mubadala Increases Investment Efforts in the American Chemical Industry
2023/5/30
Recently, it has been reported by ICIS that the Abu Dhabi sovereign wealth fund, Mubadala, is making significant investment moves in the American chemical industry through Abu Dhabi National Oil Company (ADNOC) and its investment arm, the Abu Dhabi Investment Authority (ADIA). Of particular interest is Mubadala's acquisition plans for Brazil's Braskem, which, if successful, coupled with the integration of Univar Solutions, would propel Mubadala's business in the American chemical industry and generate significant synergistic effects, aiming to benefit from the reshoring of manufacturing in North America.
Rapid Advancement in American Operations
Mubadala's joint bid with private equity firm Apollo for the acquisition of Brazil's Braskem has garnered widespread attention. Braskem is Brazil's sole producer of polyolefins and holds a majority stake in Mexico's largest integrated polyethylene plant, as well as significant polypropylene facilities in the United States and Europe. According to an insider familiar with the negotiations, ADNOC and Apollo submitted non-binding offers to Braskem's controlling shareholder, Novonor, and its creditors' banks on May 5th.
In the United States, Mubadala also joined forces with Apollo to successfully acquire Univar Solutions, a chemical distributor, for $8.1 billion. Apollo will become the major shareholder, while a subsidiary of Mubadala's ADIA holds a minority stake. Based on 2022 data, Univar Solutions is a leading chemical distributor in North America, with sales of $7.5 billion in the United States, $1.1 billion in Canada, and $800 million in Latin America. The company also boasts sales of $2.1 billion in Europe. If ADNOC and Apollo's joint bid for Brazil's Braskem is successful and the acquisition of Univar Solutions is completed, Abu Dhabi will significantly enhance its presence in the American chemical industry.
Previously, in Brazil, Mubadala acquired a refinery in Bahia state from Brazil's national oil company in 2021 for $1.65 billion. In Canada, Mubadala already owns Nova Chemicals, a major polyethylene producer whose recycled plastics business is also growing. Nova Chemicals was formerly owned by the International Petroleum Investment Company of the United Arab Emirates before Mubadala acquired it in 2017. In the United States, Bayport Polymers, a joint venture between TotalEnergies' U.S. subsidiary and Novealis Holdings, in which Nova Chemicals has ownership, holds a 50% stake. As mentioned earlier, Nova Chemicals is owned by Mubadala, while ADNOC holds a 25% stake in Novealis Holdings.
If Mubadala completes the acquisition of Braskem and integrates Univar Solutions, it will possess the largest polyolefin producer in South America (Braskem), the sole polyolefin producer in Brazil (Braskem Idesa), the largest polyethylene producer in Canada (Nova Chemicals), and a stake in the leading chemical distributor in North America (Univar Solutions). According to ICIS' report, this signifies tremendous potential for synergistic effects.
"Sharing" in the Reshoring of Manufacturing in North America
Before announcing the deal with Apollo and Mubadala, David Jukes, CEO of Univar Solutions, stated that he believed the revival and reindustrialization of manufacturing in North America had attracted investment. Jukes said, "The trend of reindustrialization in North America means there are enormous growth opportunities for the chemical industry throughout the Americas. No one has better in
organic and organic chemical distribution assets in North America than we do." He believes this has garnered favorable attention and funding for Univar Solutions.
Recently, the passing of the U.S. Chip and Science Act and the U.S. Inflation Reduction Act has stimulated the revival of the U.S. high-tech manufacturing industry and brought about substantial demand for chemicals. This not only stimulates manufacturing in the United States but also benefits manufacturing in Canada and Mexico, which have signed free trade agreements with the United States. The reshoring of manufacturing in North America will reshape the global chemical industry landscape in the coming decades. Chemical and other manufacturing companies are queuing up to make the most of recent U.S. policies and incentives from the Infrastructure Investment and Jobs Act. In this scenario, investing in the United States is not only profitable for manufacturing companies, but investments in Mexico and Canada also hold the potential for returns.
While South America may not necessarily benefit from the incentives of the U.S. government, ICIS believes Brazil still has the potential to become a cost-competitive production country. Currently, Brazil's national oil company is developing subsea layers of rock to seek increased ethane feedstock supply. Meanwhile, Braskem has been importing ethane feedstock from the United States for its cracking units located in Duque de Caxias, Rio de Janeiro state. Once the ethane supply is in place, Braskem can significantly expand the capacity for ethylene and polyethylene production, which has been under consideration since 2015. Pedro Freitas, CFO of Braskem, stated, "We would be interested in expanding olefin production if more natural gas liquids become available in sub-salt layers." It is for this reason that Mubadala is eagerly entering the North American and Brazilian chemical markets, according to ICIS.
Rapid Advancement in American Operations
Mubadala's joint bid with private equity firm Apollo for the acquisition of Brazil's Braskem has garnered widespread attention. Braskem is Brazil's sole producer of polyolefins and holds a majority stake in Mexico's largest integrated polyethylene plant, as well as significant polypropylene facilities in the United States and Europe. According to an insider familiar with the negotiations, ADNOC and Apollo submitted non-binding offers to Braskem's controlling shareholder, Novonor, and its creditors' banks on May 5th.
In the United States, Mubadala also joined forces with Apollo to successfully acquire Univar Solutions, a chemical distributor, for $8.1 billion. Apollo will become the major shareholder, while a subsidiary of Mubadala's ADIA holds a minority stake. Based on 2022 data, Univar Solutions is a leading chemical distributor in North America, with sales of $7.5 billion in the United States, $1.1 billion in Canada, and $800 million in Latin America. The company also boasts sales of $2.1 billion in Europe. If ADNOC and Apollo's joint bid for Brazil's Braskem is successful and the acquisition of Univar Solutions is completed, Abu Dhabi will significantly enhance its presence in the American chemical industry.
Previously, in Brazil, Mubadala acquired a refinery in Bahia state from Brazil's national oil company in 2021 for $1.65 billion. In Canada, Mubadala already owns Nova Chemicals, a major polyethylene producer whose recycled plastics business is also growing. Nova Chemicals was formerly owned by the International Petroleum Investment Company of the United Arab Emirates before Mubadala acquired it in 2017. In the United States, Bayport Polymers, a joint venture between TotalEnergies' U.S. subsidiary and Novealis Holdings, in which Nova Chemicals has ownership, holds a 50% stake. As mentioned earlier, Nova Chemicals is owned by Mubadala, while ADNOC holds a 25% stake in Novealis Holdings.
If Mubadala completes the acquisition of Braskem and integrates Univar Solutions, it will possess the largest polyolefin producer in South America (Braskem), the sole polyolefin producer in Brazil (Braskem Idesa), the largest polyethylene producer in Canada (Nova Chemicals), and a stake in the leading chemical distributor in North America (Univar Solutions). According to ICIS' report, this signifies tremendous potential for synergistic effects.
"Sharing" in the Reshoring of Manufacturing in North America
Before announcing the deal with Apollo and Mubadala, David Jukes, CEO of Univar Solutions, stated that he believed the revival and reindustrialization of manufacturing in North America had attracted investment. Jukes said, "The trend of reindustrialization in North America means there are enormous growth opportunities for the chemical industry throughout the Americas. No one has better in
organic and organic chemical distribution assets in North America than we do." He believes this has garnered favorable attention and funding for Univar Solutions.
Recently, the passing of the U.S. Chip and Science Act and the U.S. Inflation Reduction Act has stimulated the revival of the U.S. high-tech manufacturing industry and brought about substantial demand for chemicals. This not only stimulates manufacturing in the United States but also benefits manufacturing in Canada and Mexico, which have signed free trade agreements with the United States. The reshoring of manufacturing in North America will reshape the global chemical industry landscape in the coming decades. Chemical and other manufacturing companies are queuing up to make the most of recent U.S. policies and incentives from the Infrastructure Investment and Jobs Act. In this scenario, investing in the United States is not only profitable for manufacturing companies, but investments in Mexico and Canada also hold the potential for returns.
While South America may not necessarily benefit from the incentives of the U.S. government, ICIS believes Brazil still has the potential to become a cost-competitive production country. Currently, Brazil's national oil company is developing subsea layers of rock to seek increased ethane feedstock supply. Meanwhile, Braskem has been importing ethane feedstock from the United States for its cracking units located in Duque de Caxias, Rio de Janeiro state. Once the ethane supply is in place, Braskem can significantly expand the capacity for ethylene and polyethylene production, which has been under consideration since 2015. Pedro Freitas, CFO of Braskem, stated, "We would be interested in expanding olefin production if more natural gas liquids become available in sub-salt layers." It is for this reason that Mubadala is eagerly entering the North American and Brazilian chemical markets, according to ICIS.
JIN DUN CHEMICAL has built a special (meth) acrylic monomer manufacturing base in ZHEJIANG province. This makes sure the stable supply of HEMA, HPMA, HEA, HPA, GMA with high level quality. Our special acrylate monomers are widely used for thermosetting acrylic resins, crosslinkable emulsion polymers, acrylate anaerobic adhesive, two-component acrylate adhesive, solvent acrylate adhesive, emulsion acrylate adhesive, paper finishing agent and painting acrylic resins in adhesive.We have also developed the new and special (meth) acrylic monomers and derivatives. Such as the fluorinated acrylate monomers, It can be widely used in coating leveling agent, paints, inks, photosensitive resins, optical materials, fiber treatment, modifier for plastic or rubber field. We are aiming to be the top supplier in the field of special acrylate monomers, to share our rich experience with better quality products and professional service.
