• China chases a global oil presence – CNOOC prepares a take over bid of UNOCAL

State owned China National Offshore Oil Corp. (CNOOC), the third largest oil and gas group in China, has asked bankers to study a takeover bid for UNOCAL (nineth largest oil company in the US) to be followed by the immediate sale of its US assets.  CNOOC had been looking at UNOCAL’s assets in Asia, in countries such as Thailand, Indonesia and Myanmar. Several energy analysts have indicated and agreed that based on the initial report, the price tag  of UNOCAL seems to be too high for CNOOC.  Although the progress is at a preliminary stage, foreign energy executives who judge CNOOC to be the best of China’s state energy group said that the company should not be underestimated. It should also be noted that CNOOC possible purchase of UNOCAL also represents a new approach for Chinese oil and gas companies in that it would not just be acquiring for single oilfields but an extensive regional network (Source: Financial Times)

• Mittal Steel in talks to take Chinese stake

Mittal Steel is in talks to buy a stake in a subsidiary of Hunan Valin Iron and Steel of China which would greatly increase the exposure of the world’s largest steelmaker to the expanding Chinese economy.  A deal between the two companies would mark the first sizeable investment by a large non-Chinese steelmaker in an established Chinese steel company and underline the growing interest by Western business. Lakshimi Mittal, the Chairman of Mittal Steel, said that it had entered a preliminary discussion with Hunan Valin for a stake in their subsidiary – Hunan Valin Steel Tube and Wire. It is believe that Mr. Mittal is taking a hefty stake in Hunan Valin subsidiary as a prelude to make a larger investment in  or acquiring the parent business. Hunan Valin is China’s sixth largest steelmaker with a production of 7 million tonnes per year. It is based in Hunan province just south of the central area of the country and close to several fast growing industrial region. Hunan Valin Steel and Wire has a market capitalisation of US$ 874 Mn. (Source: Financial Times)

• Basell suitors make joint offer

Four private equity firms have teamed up to make a joint bid for Basell, the petrochemical business owned jointly by BASF and Royal Dutch Shell. The offer could value Basell at about  € 4 Bn.  Blackstone and Apollo partners, which previously submitted a joint bid for the business, has joined forces with Bain Capital and Goldman Sachs Capital Partners, which also had submitted a joint bid for the business.  BASF, the world’s largest chemical company by sales, has also indicated that Ineon Chlor (a privately owned European Chlor Alkali metal producer) and the National Petrochemical Company of Iran has also placed a bid for the business.  The sale of Basell is part of Shell’s strategy to raise funds for their capital investment of US$ 15 Bn a year.  (Source: Financial Times)

• Holcim of Switzerland to buy Aggregate for £ 1.8 Bn

Holcim of Switzeland, the world’s second largest cement group was poised to buy Aggregate Industries of the UK in a £ 1.8 Bn deal that would mark the further consolidation of the sector.  Aggregate board said it was minded to accept a cash offer at the 138 p a share. Holcim said it was considering a further 2 p interim dividend would be paid if the offer were declared unconditional. Analysts and bankers have played down a likelihood of counter bid.  La Farge of France which owns Blue Circle has indicated no interest, whilst Cemex is still being excluded after taking over RMC last September. Scottish Widows Investment Partnership which owns 7% of Aggregate has said that any acquirer should pay a premium because the company possesses a unique collection of assets and a highly regarded management team.  Holcim sees the acquisition deal as a way of accessing new markets. They also hope to lock in top Aggregate executives for 18 months if the deal would push through.  The purchase would mark a strategy switch for the Swiss group which trades at a premium to its peers as a “pure” cement maker focused on emerging market  (Source: Financial Times)