LONDON (ICIS)–Abu Dhabi state oil and petrochemicals player ADNOC has launched a public takeover offer for Germany-based producer isocyanates, polycarbonates and adhesives specialist Covestro, representing an equity value of €11.7 billion. After over a year of reports of a possible deal between the players and concrete negotiations that have been underway since June this year, the Emirati company made a concrete public takeover offer of €62 per share. The price represents a 21% premium to Covestro’s per-share value at the close on 23 June, when the company announced the beginning of due diligence procedures between the two companies. ADNOC estimates the enterprise value of the deal, which also includes net debt and pension obligations that would be taken on as a result of a purchase, at €14.7 billion. The company will also subscribe to new shares representing a 10% increase of Covestro’s share capital at the offer price, which will result in proceeds of €1.17 billion to be used to further the Leverkusen-based producer’s growth strategy. The company had not responded for requests for comment on whether that sum is part of the offer price or in addition to it at the time of publication. The deal is subject to a minimum acceptance threshold of 50% of Covestro’s issued share capital plus one share, with Covestro’s management and supervisory boards backing the deal. The joint investment agreement, which would stand until the end of 2028 if the deal goes through, ADNOC has committed not to sell, close, or significantly reduce Covestro’s business activities, and to abide by existing works agreements. “We are convinced that the agreement reached today with ADNOC International is in the best interest of Covestro, our employees, our shareholders, and all other stakeholders,” said Covestro CEO Markus Steilemann. The deal will play into ADNOC’s plan to diversify and build out its chemicals platform, according to CEO Sultan Adhem Al-Jaber. “This strategic partnership is a natural fit and aligns seamlessly with ADNOC’s ongoing smart growth and future proofing strategy and our vision to become a top five global chemicals company,” he said. If the takeover deal closes, Covestro will continue to be managed as a stock corporation, the company added. (Update re-leads, adds detail throughout) Thumbnail photo source: Covestro

LONDON (ICIS)–Manufacturing output in the eurozone fell at its steepest rate this year in September to hit a nine-month low. Key measures of factory strength such as production, new orders, employment and procurement activity all declined at quicker rates, according to purchasing managers’ index (PMI) data on Tuesday. The HCOB (Hamburg Commercial Bank) eurozone manufacturing PMI fell to 45.0 in September from 45.8 in August, while manufacturing output declined to 44.9, also from 45.8 in the previous month. Both were at a nine-month low, said S&P Global which compiles the indexes. A figure above 50 indicates growth, and below 50 contraction. “Lower output volumes were a response to the prevailing demand environment, which deteriorated further during September,” the market intelligence group said in a statement. Growth in Spain and Greece was offset by weakness elsewhere, particularly in the eurozone’s largest manufacturing sector Germany, which recorded its most pronounced worsening of factory conditions for 12 months. Countries ranked by PMI: September Spain 53.0 4-month high Greece 50.3 12-month low Ireland 49.4 3-month low Italy 48.3 2-month low Netherlands 48.2 2-month high France 44.6 3-month high Austria 42.8 6-month low Germany 40.6 12-month low “While handling the global manufacturing downturn surprisingly well, Spain just does not have enough weight to lift the rest of the eurozone with it,” said Cyrus de la Rubia, chief economist at Hamburg Commercial Bank. “The worsening industrial slump in Germany, for example, is too big for Spain’s momentum in September to make much of a difference.” In the UK, the picture was brighter as solid expansion in the sector continued in September. Although the manufacturing PMI declined to 51.5 from August’s 26-month high of 52.5, it has remained above 50 for five successive months. The main drivers of September expansion were the consumer and intermediate goods sectors, both of which recorded stronger increases in output and new business.

SINGAPORE (ICIS)–Denmark’s AP Moller Holding, the parent company of shipping company Maersk, plans to invest €1.5 billion to build a “fossil-free” plastics production plant in Antwerp, Belgium, via a new venture called Vioneo. “The Antwerp plant will benefit from the region’s expertise in the chemicals industry, strong export facilities and access to renewable energy,” AP Moller said in a statement on 30 September. The Vioneo plant is expected to use green methanol as feedstock to produce polypropylene (PP) and polyethylene (PE), with commercial operations slated to begin in 2028, the investment company said. “Fully operational, the plant will be able to produce … 300,000 tonnes of fossil-free plastics annually, corresponding to a reduction of 1.5 million tons of CO2 [carbon dioxide] emissions,” it said. The plant will be located within the Antwerp energy park of Dutch logistics firm Vopak, with support from Vopak Belgium and the Port of Antwerp-Bruges. Project plans will take place in phases, with front-end engineering design (FEED) to begin in Q4 2024, and with the final investment decision (FID) expected in 2025. In a separate statement, the Port of Antwerp-Bruges said that the project is expected to generate “significant job opportunities” during the construction phase and around 250 permanent positions when the plant is fully operational. ($1 = €0.90)

HOUSTON (ICIS)–Even with many states seeing unfavorable weather recently, the pace of the US harvesting continues to be steady with 21% of corn acreage now completed with soybeans at 26% finished, according to the latest US Department of Agriculture (USDA) weekly crop progress report. According to the weekly update, the current rate of corn harvest is even with the 2023 level of 21% and slightly ahead of the five-year average of 18%. Texas continues to be the top state for harvesting progress at 91% of its acreage completed, followed again by North Carolina at 72%. There is 96% of the corn acreage which is dented, which is slightly behind the 97% from 2023 but is above the five-year average of 95%. For corn maturity, there is 75% of the crop at this level, which is below last year’s rate of 79% but is higher than the five-year average of 70%. Looking at corn conditions, there continues to be 4% rated very poor and 8% poor with there being 24% as fair. The amount rated good is at 49% with 15% still listed as excellent. Soybeans dropping leaves has climbed to 81%, and while this is just behind the 82% achieved last season it is above the five-year average of 73%. Harvesting of soybeans is now at 26%, which is ahead of the 20% level from 2023 as well as the five-year average of 18%. Louisiana remains in the lead on harvesting completion with 71% of the state’s acreage now finished, followed by Mississippi at 66%. For soybean conditions, there were no changes once again in the update with it remaining as 3% seen as very poor, with 8% as poor, 25% listed fair with 52% as good and 12% rated as excellent. In other harvesting updates, there is 20% of the cotton crop completed with sorghum at 35% finished.

HOUSTON (ICIS)–The US fertilizer industry along with their agricultural counterparts were trying to assess damages and determine how long activities might be limited or even remain halted as Hurricane Helene delivered a mighty strike with intense winds and tremendous rainfall leading to historic flooding. Across several southeastern states the severity of the impacts affected plant operations and loadings with confirmed issues in Florida, Georgia and North Carolina with some damage reported at the port in Tampa, Florida, which did reopen on 29 September. There was also localized flooding within the city and surrounding communities but the fertilizer hub with its vital production, storage and logistical assets missed the full wrath of the hurricane, which had rapidly intensified before making landfall. Producer Mosaic had earlier informed that it did experience some issues with its operations in Florida as there was water intrusion at its Riverview site, which was caused by storm surge that has left the facility offline. A site cleanup must be undertaken so the operations are not anticipated to see a return to full capacity for about 10 days, but Mosaic did not respond for further comment on whether it had experienced any other impacts to its business activities. Canadian fertilizer major Nutrien said it is still evaluating the total impacts of the hurricane landfall but while its Aurora facility in North Carolina experienced heavy rainfall, the facility did not close during the event and is fully operational. The producer said it did undertake precautionary measures at other sites. “Following Hurricane Helene’s landfall last Friday, Nutrien’s Augusta, Georgia, and White Springs, Florida, facilities were shut down under safety protocols during storm-induced power failures,” said a Nutrien spokesperson. “All our colleagues are safe at these locations, but many area roads remain closed due to downed power lines and flooding. It could be several more days before a post-storm assessment is complete.” For fertilizer interests overall there was optimism that while the storm potentially wiped out what crops had not been finished in some locations, it should not have a lingering sway on upcoming demand or supply availability once flooding recedes and acreage dries as there is still plenty of acreage left to complete. As an industry source said, “I don’t think it matters at all. We just need some more harvesting so farmers can think about application.” Corn harvest is now 21% complete, while soybeans have reached 26%. While September has been treading a tad slower than normal, with repeated tropical weather threats a key factor, there was sentiment that when looking ahead at October there will be more traction forward for some products. As a trader said, “I think prices will move up on UAN [urea ammonium nitrate] because of the supply disruptions but hard to say how much. Phosphate is probably the most bullish out of everything, urea doesn’t really have an impact.” The extent of crop damage will not be clear for at least several days, maybe longer. The concern is still that a reduction in yield means a drop in income back to the grower who then will have more pressure on how to manage upcoming input expense.

SAO PAULO (ICIS)–The port at Tampa in the US state of Florida reopened over the weekend, the port’s authorities said on Sunday, after Hurricane Helene’s destructive path put the US state of Florida against the ropes. Recovery efforts were underway in Florida as well as states to the north such as South Carolina, Georgia, North Carolina, Virginia and Tennessee. The hurricane’s death toll surpassed 100 over the weekend, while some analysts have said Helene’s economic impact could stand at up to $160 billion. Meanwhile, the US Bureau of Safety and Environmental Enforcement (BSEE) estimated on Sunday that approximately 3.35% of oil production and 0.91% of natural gas production in the US Gulf Coast were shut-in when it issued that update. Some railway lines, meanwhile, remained shut in and out of Florida, but companies managed to bring back to operation the most important routes over the weekend. TAMPA RETURNSThe Port of Tampa was the most affected by the hurricane, which made landfall on 27 September in the Big Bend area of Florida where the port is situated; more than 4 million Floridians lost power right after it made landfall. Other ports affected were Panama City, St Joe, St Petersburg, Manatee and Key West on Florida’s west coast; Fernandina, Jacksonville and Canaveral on Florida’s east coast. All of them have now returned to normal. “Port Tampa Bay has resumed vessel operations and our port’s shipping channels are officially re-opened, with vessel movements restricted to daylight hours… Our hope is that the port’s shipping channels will be functional at their full depths shortly,” said the Port Tampa Bay authority on Sunday. “Port staff fully assessed the docks, wharfs and terminals for safety. Commercial vessel traffic is again being queued for a return to full operations at the port, meaning we are open for business. Some of the first vessels to return will be fuel tankers, cruise ships and vessels carrying perishable cargo.” The hurricane was expected to disrupt the movement of fertilizers and grain coming in and out of Tampa, as well as some companies’ operations in the area which are expected to remain shut for a few days. Some petrochemicals end markets such as plastic bales, with collection across much of the south and southeast of the US expected to be delayed. GULF COAST OIL, GASThe US’s BSEE said no personnel had been evacuated from any of the five non-dynamically positioned (DP) rigs operating in the Gulf Coast; rigs can include several types of offshore drilling facilities including jackup rigs, platform rigs, all submersibles and moored semisubmersibles. “A total of one DP rig moved off location out of the storm’s path as a precaution. This number represents 4.76% of the 21 DP rigs currently operating in the Gulf. DP rigs maintain their location while conducting well operations by using thrusters and propellers,” said the BSEE. “These rigs are not moored to the seafloor, so they can move out of harm’s way in a relatively short time frame. Personnel remain on board and return to the original location once the storm has passed.” BSEE said the 3.35% shut-in oil production could correspond to around 59,000 barrels of oil per day, while the 0.91% of shut-in gas production would correspond to 17 million cubic feet per day. It added that facilities are to be inspected in coming hours following the hurricane, adding “production from undamaged facilities will be brought back online immediately” although those with damage may naturally take longer to bring back online. RAIL DISRUPTIONS Railroad company CSX said all railways in Florida had now reopened except for two: the Clearwater and Brooksville Subdivisions. “CSX continues to work around the clock… The storm… left significant rain and wind damage in its path, resulting in flooding, downed trees and power outages. Over the weekend, we have made substantial progress in clearing the network and making necessary repairs,” said the rail operator. “However, potential delays remain. We are rerouting traffic to meet your needs and committed to fully restoring service as quickly and safely as possible.” Rail operator Norfolk Southern also said it had made substantial progress over the weekend in recovering railways affected by the storm, with its major routes in Florida and those connecting some key urban areas of the state with Tennessee and Georgia were also operational. However, it said some routes were still out of service as of Monday, including the line Macon-Brunswick; routes east and west of Asheville; Bluefield in West Virginia to Norton in Virginia; Augusta to Millen, in Georgia; and Augusta in Georgia to Columbia in South Carolina. “Customers with shipments moving through these areas that are currently out of service could see delays of 72 hours,” concluded Norfolk Southern. ONE OF THE MOST DAMAGINGOn Monday, analysts at AccuWeather said they were sharply increasing their economic loss estimates from Helene to between $145 billion and $160 billion, around 50% higher than their prior estimate at between $95 billion and $110 billion. The analysts said the increase reflected the additional “grim damage reports” received over the weekend, which would make Hurricane Helene one of the costliest storms in US history because of the devastating storm surge, damaging winds and historic flooding. “The majority of homes and businesses in some communities are destroyed and some have been washed away. Bridges, roadways and other expensive and critical infrastructure have been heavily damaged or destroyed,” said AccuWeather. “Pictures and video from the scene, as limited as those reports have been due to ongoing major communication infrastructure damage, suggest one of the worst flooding disasters in US history, with tragically striking similarities in damage to other catastrophic floods such as flooding associated with Hurricane Katrina, the flooding from Hurricane Harvey and the Johnstown, Pennsylvania, Floods of 1889 and 1977.” ECONOMIC IMPACT FROM HURRICANESIn billion dollars Source: AccuWeather Front page picture: Aerial view of Tampa’s port; archive image Source: Tampa Port Bay authority

HOUSTON (ICIS)–Here are the top stories from ICIS News from the week ended 27 September. Meteorologists expect hurricane to form, hit US Gulf Coast in Florida Meteorologists expect a hurricane will form later in the week before making landfall in northwestern Florida at the eastern end of the Gulf of Mexico, they said on Monday. INSIGHT: Weak volumes, geopolitical uncertainty hold back chemical M&A The lack of a meaningful recovery in volumes amid a weak macroeconomic backdrop along with geopolitical uncertainty are key factors hindering mergers and acquisitions (M&A) activity, panelists said at a recent meeting of the Societe de Chimie Industrielle in New York. UPDATE: BASF sets new corporate strategy, mulls ag solutions IPO, to exit Brazil coatings BASF is planning an overhaul of its structure, marking a clearer delineation between businesses it considers core and “standalone” units serving specific industries, and is readying the separation of its agricultural solutions operations. A quarter of US Gulf oil output remains shut on Hurricane Helene A quarter of US oil production in the Gulf of Mexico remains shut in as Helene becomes close to becoming a major hurricane. More than 4 million in southeast US lose power after Hurricane Helene More than 4 million outages were reported in the southeastern US on Friday after Hurricane Helene made landfall as a powerful Category 4 storm in northwestern Florida. SHIPPING: US ports file unfair labor practice charge with regulator, but ILA strike is imminent With the midnight Monday strike deadline rapidly approaching, negotiations between US Gulf and East Coast ports and the labor union representing dockworkers remains at an impasse, making a stoppage that could cost the US economy $5 billion a day more likely.

LONDON (ICIS)–The UK economy grew at a slower rate than initially thought in the second quarter, according to revised GDP figures from the Office for National Statistics (ONS) on Monday. The official statistics agency revised down quarterly GDP growth to 0.5% from 0.6% in its first estimate in August. Compared to the same quarter in 2023, GDP growth was up by 0.7%, revised down from an initial estimate of 0.9%. “The quarterly path of real GDP at an aggregate level is largely unchanged,” the ONS said in a statement.

LONDON (ICIS)–Click here to see the latest blog post on Chemicals & The Economy by Paul Hodges, which suggests Saudi’s decision to focus on market share may turn out to be the catalyst for deflation. Editor’s note: This blog post is an opinion piece. The views expressed are those of the author and do not necessarily represent those of ICIS. Paul Hodges is the chairman of consultants New Normal Consulting.