09.07.2014 • NewsDede WillamsKratonLCY Chemical

Kraton Puts LCY Merger on Hold for Now

Kraton Performance Polymers is at least temporarily stepping back from plans to merge with Taiwanese rival LCY Chemical Corp.

The Houston, Texas-based manufacturer of styrenic block copolymers (SBC) said it has notified its potential partner that its board of directors intends to withdraw its recommendation that Kraton shareholders approve the combination agreement signed at the end of January 2014.

Observers now expect the deal, initially scheduled to close in the fourth quarter of this year, to be renegotiated. If successful, it would create a leading worldwide manufacturer of SBC with more than $2 billion in annual sales.

Explaining the rethink, Kraton pointed to declines in the operating results of the LCY's SBC activities in the 2014 first quarter as well as the deterioration in its full-year outlook. It also cited a decline in its own share price and negative reactions from shareholders following its management's announcement on 24 June that the merger could take two years longer to pay off than originally expected.

SBC is the largest of LCY's seven business units, last reporting annual sales of $612 million. In the first quarter of this year, EBITDA fell to just below $3 million, and reports said the second quarter was not expected to show improvement.

If requested by LCY,  during the five-day notice period Kraton will be obliged to negotiate in good faith with the Taiwan company regarding any revisions or adjustments proposed by LCY to the terms and conditions of the agreement that would enable its board to continue to recommend the share transfer.

The combination agreement will remain in effect unless and until it is terminated in accordance with its terms, Kraton said. It added that it does not intend to make further public comment regarding the status of any negotiations

Analysts said they believed the deal still had has merit, but probably at a lower price.

Whitepaper

Cannabis Extraction — Temperature Control Systems in Action

Cannabis Extraction — Temperature Control Systems in Action

Cannabis is a crop that has been cultivated for thousands of years and contains many pharmacologically active substances.

Free Virtual Event

ProteiNext 2025

ProteiNext 2025

ProteiNext is an annual symposium that offers a platform for sharing insights on protein analysis

most read

Photo
24.01.2025 • News

CEFIC Publishes 2024 Facts and Figures Report

CEFIC , the European Chemical Industry Council, has published its 2024 Facts & Figures report, which reinforces the need to take bold and urgent action to secure Europe’s industrial future, not only to implement the Green Deal but also to prevent further de-industrialization in Europe.

Photo
19.03.2025 • NewsInnovation

Data-Driven Enzyme Immobilization

Inseit, based in Bern, develops biocatalysts for industrial setups using enzyme immobilization and biocomputation. Addressing biotech and sustainability challenges, Inseit was selected for Venture Leaders Biotech and won two Nucleate accelerator prizes.

Photo
27.03.2025 • News

J&J to Invest $55 Billion in US Operations

US healthcare giant Johnson & Johnson (J&J) has unveiled plans to invest over $55 billion in the US over the next four years. This significant investment marks a 25% increase compared to the previous four years, the company said.

Photo
27.03.2025 • News

Moeve Joins Global Impact Coalition

The Global Impact Coalition (GIC), a collaborative platform led by CEOs and focused on achieving a net-zero chemicals future, has announced the addition of Moeve as its newest member.