M&As: Arkema acquires Dow’s laminating adhesives biz; Adnoc not pursuing US$2 bn stake in Brazil's Braskem

French firm Arkema has agreed to acquire US materials firm Dow's flexible packaging laminating adhesives business, one of the leading producers of adhesives for the flexible packaging market, generating annual sales of around US$250 million. The proposed acquisition will significantly expand Arkema's portfolio of solutions for flexible packaging, enabling the Group to become a key player in this attractive market.

Dow's flexible packaging laminating adhesives business offers a broad range of high-quality solutions in food and medical applications, where flexible packaging is the optimal solution in terms of efficiency, as well as for industrial lamination (window films, photovoltaic backsheets, etc.). The flexible packaging market is expected to grow at GDP+ in the coming years, driven in particular by the need for more sustainable and recyclable solutions.

Boasting well-recognised brands such as Adcote and Mor-Free, and five production sites in Italy, the US and Mexico, Dow's laminating adhesives business is one of the main historical solutions providers for the packaging industry, with presence in North America and Europe.

Combined with Bostik's existing commercial presence, product offering and technological breadth for flexible packaging, this operation will enable Bostik to ideally complement its existing business, marking a step change and a unique opportunity for Bostik to position itself as one of the key global partners for customers across the packaging industry.

Beyond benefiting from the underlying growth and the recovery of the market in the coming years, Arkema aims to rapidly capture new growth opportunities and deliver a high and balanced level of cost and development synergies, which should represent around US$30 million in EBITDA after 5 years.

Meanwhile in other news, Abu Dhabi National Oil Co. (Adnoc), the biggest oil producer in the United Arab Emirates, has dropped its bid to acquire a stake in Brazil's Braskem SA, according to a statement from Braskem. Adnoc informed Novonor SA, Braskem's main shareholder, that it was no longer interested in continuing negotiations to buy a stake in the Latin American petrochemicals giant.

The decision represents a setback for Adnoc's ambitions to build a global chemicals business and diversify beyond just producing crude oil and refined products.

Bloomberg reports that Adnoc had made a non-binding US$2.1 billion offer for a stake in Braskem and proposed sharing control with Brazil's Petrobras, similar to Novonor's current arrangement. However, issues like valuation appear to have derailed the deal.

For Novonor, the failed sale process is another delay in its efforts to sell the Braskem stake to appease creditors after years of trying.

Meanwhile, Adnoc's pursuit of other major chemical deals like acquiring Germany's Covestro AG and merging two plastics units into a US$30 billion business have also hit a roadblock over valuation disagreements, according to Bloomberg.

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