As anticipated (C&EN, July 19, page 9), Clariant has agreed to sell its AZ Electronic Materials unit to the London-based Carlyle Group of financial investors for $415 million, as part of its restructuring efforts. The deal is expected to close this fall, assuming approval from antitrust authorities. AZ supplies the semiconductor and flat-panel display industries with photoresists and other critical materials. Clariant put the business up for sale in August 2003 as part of an effort to improve its financial condition. AZ has manufacturing and R&D sites in Japan, South Korea, Taiwan, Germany, France, and the U.S., and last year it had sales of about $350 million. "For Clariant, the sale enables us to keep our promise to lower debt and to focus on our core businesses. For AZ Electronic Materials and its employees, there is now a fully committed and focused shareholder who will invest to grow the business," Clariant CEO Roland Lösser says. Carlyle says it will support AZ's recently announced Taiwan expansion and China site development project.
The Biotechnology Industry Organization has named Republican Congressman James C. Greenwood as its next president, succeeding retiring leader Carl B. Feldbaum. Greenwood will drop out of a reelection race in Pennsylvania's eighth district for his seat in the House of Representatives to lead the organization, which represents more than 1,000 companies as well as academic and research centers. Since 2001, Greenwood has served as chairman of the House Energy & Commerce Subcommittee on Oversight & Investigations.
Centocor, a Johnson & Johnson subsidiary focused on immunologic and cardiovascular disorders, is building a biopharmaceuticals plant in Ringaskiddy, Ireland. Work there will involve fermentation and purification as well as the development of new production methods. According to a company spokesman, the plant will employ approximately 330 people when it opens by 2010. After weighing various geographic options, Centocor decided on Ringaskiddy in County Cork, where pharmaceutical manufacturing has come to find a home of late. The company plans to tap into the technological know-how of its existing plant in Leiden, the Netherlands.
The Defense Energy Support Center has reopened bidding on a contract to supply the U.S. government with hydrazine rocket propellant. DESC took the action following Arch Chemicals' protest of the center's decision to award the contract to a new firm, SpaceChem, that promised to build a new hydrazine plant (C&EN, May 10, page 15). Arch has been the sole supplier of hydrazine to the U.S. government for more than 50 years. The new closing date for bidding is Sept. 9.
Crompton Corp. plans to let go of more than 540 workers--some 10% of its total--by the end of the year in an organizational overhaul launched by new CEO Robert L. Wood. Crompton says the measures are more extensive than normal cost cutting and result from an analysis that pinpointed duplicate work processes due to the company's growth through numerous acquisitions. The measures will yield at least $50 million annually in pretax savings. As a result of the program, the company expects to take a $50 million restructuring charge. The company says its hand was forced by high prices for energy and feedstocks--including hydrocarbons, soybean oil, and tin--the costs of which are expected to increase by some $30 million this year.
In the course of reporting its first-half results last week, DSM said that it aims to trim 1,000 jobs in addition to the 1,000 cuts in fine chemicals and main-site operations announced earlier in the year. The company is still reviewing the sites acquired with the Roche fine chemicals operations, executives say. They expect to be able to identify where job cuts are possible and in what number by the end of the year.
J. M. Huber has reached an agreement, as expected, to acquire the 71% of CP Kelco it does not already own from Lehman Brothers Merchant Banking Partners. Huber obtained its minority stake in the maker of xanthan gum, pectin, and carrageenan--used as food thickeners--earlier this year when it purchased Hercules' 29% interest for $27 million. Family-owned Huber, which owns businesses in minerals, specialty chemicals, and engineered wood products, bought carboxymethylcellulose thickeners maker Noviant in 2001.
Ferro will delay release of its second-quarter results by one month, pending completion of an investigation into accounting irregularities within its polymer additives business. The company says the unit made inappropriate entries and overstated its performance. According to CEO Hector R. Ortino, "The personnel within polymer additives we believe were potentially responsible have either resigned or been put on administrative leave." Ferro says the unit concealed its inability to raise selling prices to keep pace with escalating raw material costs. As a result, the firm will take a charge of $4.2 million and says earnings for the quarter will be 70% less than expected. Securities lawyers are already circling. The law firm of Lerach Coughlin Stoia & Robbins says it has filed a class-action lawsuit to recover damages to shareholders, who saw Ferro's stock price decline 16% to $20.68 following the firm's announcement.
LG Chem and Degussa have signed a preliminary agreement to jointly develop new types of materials that can be used in electronic devices. LG says no further details are available. But the South Korean firm notes that it already conducts research with other organizations in the U.S., Japan, and China aimed at developing new electronic materials, better technology for rechargeable batteries, and materials for liquid-crystal displays.
Several drug development pacts were announced last week, including an agreement between Lexicon Genetics and Takeda Pharmaceutical to develop new drugs for the treatment of high blood pressure. Under the agreement, Takeda will have responsibility for screening, medicinal chemistry, development, and commercialization of drugs directed against Lexicon's novel blood pressure targets. Lexicon will receive an up-front payment of $12 million from Takeda for the initial three-year term of the agreement. Takeda will also make milestone payments for each target selected for therapeutic development, and Lexicon will receive royalty payments on each commercialized drug. In other deals, Sunesis will provide Merck with a series of small-molecule compounds targeting viral infections, Locus Pharmaceuticals will apply computational drug design technology to identify new protein binding sites in a diabetes drug collaboration with Procter & Gamble Pharmaceuticals, and TransForm Pharmaceuticals will develop proprietary informatics tools for Eli Lilly's use in preclinical drug candidate screening.
U.S. chemical prices increased for the seventh straight month in June, according to data from the Labor Department. The producer price index for chemicals and allied products rose 0.5% from May to 171.4 (1982 = 100) and was up 5.7% from June 2003. Meanwhile, the index for the important industrial chemicals segment jumped 1.5% from the previous month to 156.4. The June index for industrial chemicals was 10.1% above the comparable month last year.
Syngenta and Diversa have modified their alliance in the enzymes field. Under a new agreement, the two firms' existing Zymetrics joint venture for animal-feed enzymes will be managed exclusively by Syngenta. Syngenta will pay Diversa an exclusivity fee and continue to fund R&D. At the same time, the two will collaborate on R&D of other enzymes and selected antibody and other biopharma products. The new agreement provides for a number of Syngenta employees to work alongside Diversa scientists at Diversa's San Diego headquarters.
BASF and Shell Chemicals are reviewing strategic options for Basell, their 50-50 polyolefins joint venture. The options include the sale of their stakes or spinning off Basell as a publically traded company. The partners are consulting Credit Suisse First Boston and Lazard on their options. "As an independent company, Basell has integrated and consolidated its businesses in all parts of the world with great success and is now established as a global industry leader," says John Feldmann, BASF board member responsible for plastics. The $6.8 billion-per-year venture was formed in 2000.
Scynexis has been awarded a three-year contract to produce bulk drug substances for the National Institute on Drug Abuse's program to develop safe and effective medications for illicit drug dependency. The current Good Manufacturing Practices contract is valued at up to $3 million.
Cognis' Disponil AFX surfactant, a polyglycol ether fatty alcohol, has been awarded the 2004 German Environment Prize. The "green" surfactant was developed as a replacement for what Cognis calls ecologically problematic nonylphenol ethoxylates.
Nova Chemicals is selling pipeline assets to Taylor NGL for $19 million. Included are an ethylene pipeline that supplies customers out of Nova's Joffre, Alberta, complex and the rights to a planned natural gas liquids pipeline connecting Fort Saskatchewan, Alberta, to Joffre.
Arch Chemicals has named Daniel S. Sanders, who recently announced his retirement as the head of ExxonMobil Chemical, to its board of directors. Arch CEO Michael E. Campbell says he was impressed with Sanders when they served together on the board of the American Chemistry Council.
ICI's National Starch & Chemical unit will build a $12 million technology development and service lab in China for its Ablestik adhesives business, ICI CEO John McAdam said at a press conference last week. ICI is also planning a Chinese lab for its Acheson electronic materials unit.
Sanofi-Synthélabo's bid for Aventis has been cleared by the Federal Trade Commission. FTC is demanding the previously disclosed sale of drugs to Glaxo and Pfizer (C&EN, July 5, page 8) as well as the sale of a royalty interest in Estorra, an insomnia treatment.
Rockwood Specialties will pay about $50 million to acquire Johnson Matthey's pigments and dispersions business. The $70 million-per-year operation produces transparent iron oxide pigments and dispersions, color concentrates, and complex