Intellectual Thoughts by Sanjay Panda: stock

Showing posts with label stock. Show all posts
Showing posts with label stock. Show all posts

Lithium finding in India , EV industry Charged Up..

As India gears up to boost electric vehicle (EV) adoption, the massive find of lithium reserves in the country has built up  excitement , hope of self-Reliance & brightened up the prospects for the country in the field of EV battery cell manufacturing. 

According to the Council on Energy, Environment and Water (CEEW), the country will require USD 4.5Billion of investment to meet its domestic lithium-ion battery manufacturing target of setting up 50 GWh of lithium-ion cell and battery manufacturing plants. India's lithium cell production is projected to be 900 GWh by 2030.  

 "The 5.9 million tonnes of lithium reserves found in J&K, If completely extracted and converted into battery-grade Lithium  salts can support up to  great extent   though  the   details about quality, nature etc are yet to be fully established.

Lithium is  the lightest  metal & lightest  solid element . Being highly reactive   not found in its elemental form.  Mostly found in concentration with other materials in the form of oxides and carbonates. Extracting & converting the raw lithium to battery-grade lithium calls for a series of refining processes some of  technology are not available  in India. Very few Global companies  have  such expertise  and being doing this for decades.  

Though the EV penetration in India  till 2020  was very small , the EV penetration in India is slowly but steadily increasing, especially in the e-scooter segment. Now, the four-wheeler manufacturers have also joined the bandwagon,  specially Tata Motors  , M&M pushing India's aim to significantly cut the dependency on traditional fuels and internal combustion engine-driven vehicles by 2030.  

The slogan EV30@30  which means ,  the government expects the EV sales penetration to be 30 per cent by 2030. for private automobiles. 70 per cent for commercial vehicles, and 80 per cent for two and three-wheelers, which would not only reduce the country's oil import bills in the longer term, but also ensure a cleaner environment.  

The discovery of Lithium is vital as it comes at a time when India is going all out for a green transition in transportation,, where electric vehicle adoption has become a national priority..

FMC Corporation Announces Acquisition of Significant Portion of DuPont’s Crop Protection Business; Simultaneous Sale of Health and Nutrition to DuPont

FMC Corporation (NYSE: FMC) and DuPont (NYSE: DD)  announced the signing of a definitive agreement for FMC to acquire the portion of DuPont's Crop Protection business it must divest to comply with the European Commission ruling related to its merger with The Dow Chemical Company.  Additionally, DuPont will acquire FMC Health and Nutrition and receive $1.2 billion in cash.  FMC will acquire DuPont's global chewing pest insecticide portfolio, its global cereal broadleaf herbicides, and a substantial portion of DuPont's global crop protection R&D capabilities.  In 2017, FMC expects this acquired business will generate approximately $1.5 billion in revenue and $475 million of EBITDA.

After closing of the acquisition, FMC Agricultural Solutions will become the fifth largest crop protection chemical company in the world by revenue, with estimated annual revenue of approximately $3.8 billion. 

The Crop Protection Business Being Acquired

The acquired portion of DuPont's crop protection business includes an industry-leading selective insecticide portfolio consisting of Rynaxypyr®, Cyazypyr® and Indoxacarb.  The first two of these products have full patent protection over their respective active ingredients, and FMC expects these products will generate over $1 billion in 2017 revenue.  These selective insecticides are highly complementary to FMC's existing broad spectrum insecticide portfolio. 

The acquired portfolio also includes DuPont's global cereal broadleaf herbicides, consisting of nine active ingredients and multiple formulated products.  This herbicide portfolio comes with strong, recognized brands and DuPont's proprietary PrecisionPac® technology.  These products bring significant diversification to FMC's crop exposure in herbicides, as well as increasing the balance of pre-emergent and post-emergent applications in FMC's portfolio.

The geographic spread of the revenue in this portfolio will result in a significant increase in FMC's presence in Asia and Europe.  Following the acquisition, FMC's crop protection revenue will be almost equally spread across all four major regions – North America, Latin America, Europe and Asia.

The underlying intellectual property related to the acquired products, including patents, registrations and data packages, will be transferred to FMC.  FMC will acquire a global manufacturing network to fully support these products, including four active ingredient manufacturing facilities and 10 regional formulation plants.

The acquisition will bring DuPont's world-class discovery and development organization, including its Delaware crop protection research headquarters, 14 regional development labs and related regulatory capabilities.  This organization includes a pipeline of 15 synthetic active ingredients currently in development, covering insecticides, herbicides and fungicides, and an extensive library of 1.8 million synthetic compounds.  The majority of DuPont's crop protection research workforce will transfer to FMC as part of this transaction.

FMC Health and Nutrition Divestiture

FMC Health and Nutrition will become part of DuPont's Nutrition & Health segment. 

"FMC Health and Nutrition is a highly profitable business with leading positions across the vast majority of its portfolio, deep applications knowledge and an extensive global network of laboratories and manufacturing facilities.  It is a very complementary fit with DuPont's current portfolio.  We are confident it will thrive under DuPont's leadership and will contribute to their successful Nutrition & Health business," said Brondeau.

Additional Information

The transaction is subject to the closing of the Dow and DuPont merger, as well as customary closing conditions and regulatory approvals.  Closing is expected to occur in the fourth quarter of 2017.  FMC expects this transaction to be immediately accretive to adjusted earnings per share, and will give updated guidance for 2017 at its earnings call scheduled for May 2, 2017.  

Dyal Co. LLC and Citi acted as financial advisors and Wachtell, Lipton, Rosen & Katz acted as legal counsel to FMC.  Citi provided financing advice and committed debt facilities.

source : FMC website

Key Features of Indian Budget 2016- 2017


o   Will not resort to retrospective taxation in future; one time tax dispute resolution proposed for retrospective taxation

o   To rationalise corporate tax for new manufacturing companies

o   To implement general anti avoidance tax rule from April 1, 2017

o   Security transaction tax on options raised to 0.05 percent

o   Proposes to levy infrastructure cess of 1-4 percent certain  models of cars  (1 % on small petrol, LPG, CNG cars, 2.5% on diesel  cars of certain capacity and 4% on other higher engine capacity vehicles

o   Raises factory gate tax on various tobacco products by 10-15 percent.

o   Proposes to abolish 13 different levies


o   100 percent foreign direct investment to be allowed in food processing industry

o   Promises further reforms in foreign direct investment policy in insurance, pension, asset recast companies


o   Total stake sales in 2016/17 seen at 565 billion rupees

o   To encourage central public enterprises to divest own assets for raising resources for new projects

o   Strategic divestment seen at 205 billion rupees


o   Fiscal deficit seen at 3.9 percent of GDP in 2015/16

o   Fiscal deficit seen at 3.5 percent of GDP in 2016/17

o   Plan expenditure seen at 5.5 trillion rupees in 2016/17

o   Proposes to set up panel to review fiscal responsibility management act


o   Rural jobs programme allocated 385 billion rupees ($5.61 billion) in 2016/17

o   Farmer welfare budget to total 359.84 billion rupees

o   Rural road development to get 190 billion rupees

o   Target of agriculture credit at 9 trillion rupees

o   Interest subvention towards farm loans at 150 billion rupees

o   To set up dedicated irrigation fund worth 200 billion core

o   Allocates 55 billion rupees for crop insurance programme for 2016/17


o   Bankruptcy code for financial firms to be introduced in parliament in 2016/17

o   RBI act is being amended for implementing monetary policy framework

o   To list general insurances companies on stock exchanges


o   Government to infuse 250 billion rupees capital into state-run banks in 2016/17; will find resources for additional capital for banks if required


o   Allocates 2.21 trillion rupees for infrastructure development for 2016/17

o   Allocation for roads and highways development at 550 billion rupees

o   Capital expenditure on roads and rail development at 2.18 trillion rupees

Largest U.S. chemical companies to combine in megamerger. Could spark more deals!!

Two American  Chemical giants and possibly among the oldest,  DuPont and Dow Chemical  have agreed to combine in an all-stock merger valued at $130 billion  which  would be the 18th largest deal ever.

Dow Chemical Co. and Dupont Co. that are 118 and 213 years old, respectively, announced the blockbuster, tax free  deal that would take two years to complete.  Following the completion of the deal's in 2016, the  merged entity  would eventually    will  break up  into  3 separate, publicly-traded entities focusing on Agricultural products, Material sciences, and Specialty products.

The deal, the fifth-largest corporate merger of 2015, would certainly receive scrutiny from federal regulators, especially regarding the new companies  place in global agricultural production, including seeds, insecticides, and pesticides. Executives from both companies  however said the agrochemicals businesses have little overlap and any asset sales would likely be minor.

By revenue, the material sciences company – which makes products for the packaging, transportation, and infrastructure industries, to name a few – will be the largest. Its combined revenue in 2014 was around $51B on an adjusted basis. It will compete with the likes of corporate titans BASF, Honeywell, and 3M.

The specialty products company, with a combined revenue of $13B in 2014, would sell materials to the electronics and communications industries, among others.

The agriculture company, focusing on seeds and chemicals, would have a combined adjusted revenue of $19B overtaking BASF as the leader in agrochemicals. In the seed industry, DowDupont is pitted against behemoth Monsanto.

Dow shareholders would own 52 percent of the new company after preferred shares are converted, the companies said. The agreement includes a $1.9 billion termination fee under specified circumstances, such as rejection by shareholders.
The biggest impact will certainly be in the agriculture market, where the seeds and crop chemical industries are to undergo rapid consolidation

Prior to the merger, Dupont said in a statement it will slash $700 million in costs, with ten percent of its workforce "impacted" by the move, while Dow is expected to drop $300 million in costs.

As per Dealogic , this   merger would represent the 18th largest corporate deal of all-time. It would trail the 2015 deals made by Allergan and Pfizer, Anheuser-Busch InBev and SABMiller, BG Group and Royal Dutch Shell and Time Warner Cable and Charter Communications.

Dow and Dupont have a combined annual revenue of around $83 billion, with operating profit of about $15 billion.

Pfizer regains pole position by acquiring Allergan in a $160B deal.

Pfizer and Allergan are joining in the biggest buyout of the year, a $160 billion stock deal that will create the world's largest drugmaker. The deal is the latest and the largest to be aimed at helping an American company lower its taxes by reincorporating overseas, a practice known as a corporate inversion. The transaction would be structured as a so-called reverse merger, in which Allergan, the smaller of the two companies, would technically be the buyer.

Pfizer will keep its global operational headquarters in New York but   its legal domicile and principal executive offices in Ireland.  Legacy Pfizer expected to lead the combined company which will be called Pfizer Plc, which would have more than $63 billion in combined sales and a product portfolio that includes Viagra, Celebrex, Botox , JuvĂ©derm and  about 110,000 employees worldwide.

Under the terms of the all-share deal, Pfizer would essentially pay $363.63 for each Allergan share .  Allergan shareholders would receive 11.3 shares of Pfizer for each share of Allergan they hold. Pfizer shareholders would receive one share in the combined company for each share they hold, but have the option to take up to $12 billion in cash for some or all of their shares instead.

Pfizer Inc. Chairman and CEO Ian Read will serve in the same roles with the combined company while Allergan Plc. leader Brent Saunders will become president and chief operating officer. The combined company’s board would consist of 15 directors, with Pfizer’s 11 current directors and 4 directors from Allergan.

After the transaction, Pfizer shareholders are expected to own about 56 percent of the combined company, with the remaining 44 percent owned by Allergan shareholders The combined entity expected to achieve more than $2 billion in annual cost savings over the first three years after the deal closes.

Pfizer said that it expected the combined company’s adjusted tax rate to be between 17 percent and 18 percent by the first year after the deal is finalized. Last year, Pfizer’s tax rate was about 26.5 percent, and it is expected to be about 25 percent this year. By comparison, Allergan reported a tax rate of just 4.8 percent for 2014 and is expected to have a tax rate this year of about 15 percent.

Pfizer, based in New York, has engaged in several large deals in recent years, buying Wyeth in a $68 billion  deal and  Hospira, a maker of generic treatments, for about $17 billion this year.

Allergan was created through several mergers since 2012 that included the drug makers Forest Laboratories, Actavis and Warner Chilcott.

The deal would enable Pfizer to surpass  Novartis AG  and regain the industry's top spot.