Clariant AG's hunt for U.S. oil and gas assets paid off on Sept. 14 as the Swiss chemical maker bought two Texas-based businesses whose products are used in drilling, fracking and other processes needed by energy customers.
CEO Hariolf Kottman has lamented that the North American footprint of his oil-chemicals business was too small, prompting him to seek takeovers.
Low oil and gas prices have put pressure on acquisition targets, he has said, creating potential opportunities for Clariant.
Clariant is buying Kel-Tech Inc. of Midland, Texas, from private equity firm Arsenal Capital Partners and Irving, Texas-based X-Chem LLC from NCH Corp., with the deal to be completed on Oct. 1.
"It is part of our global strategy to seize business opportunities in key markets with excellent future prospects through innovations and bolt-on acquisitions," Kottman said in a statement.
"These acquisitions allow us to strengthen our position in one of the world's largest specialty chemicals markets," he said.
The two firms will add about $200 million to Clariant's annual sales of about 5.8 billion Swiss francs (US$5.93 billion), it said in a statement, adding it is paying for the businesses in cash. It gave no further financial details.
Kel-Tech and X-Chem are active in the oil-rich Permian Basin stretching from Texas to New Mexico which has become the biggest and fastest-growing U.S. shale oil field.
Clariant will profit from its expanded presence in the sector especially once energy prices recover, analysts from Zuercher Kantonalbank said in a note to investors.
U.S. oil and gas exploration and production company Apache Corp. (NYSE: APA) this month said it made a significant discovery in the Permian containing an estimated 3 billion barrels of oil and 75 trillion cubic feet of gas.
Clariant's specialty chemicals help stimulate production at oil and gas wells, separate solids from oil and reduce corrosion in pipelines, among other energy-related applications. (US$1 = 0.9774 Swiss francs)
Recommended Reading
Freeport LNG Readying Operation Restart After Hurricane Beryl, Sources Say
2024-07-10 - The facility is not expected to resume shipments of LNG until the port of Freeport, which is operating under vessel transit restrictions, fully reopens.
Diversified to Buy East Texas NatGas Assets from Crescent Pass
2024-07-10 - Diversified Energy’s $106 million deal with Crescent Pass Energy comes during a prolonged dip in natural gas prices that some analysts expect to rebound as demand ramps up for LNG exports and power demand.
Golden Pass LNG’s not so Golden Days
2024-07-10 - The $9.25 billion Golden Pass LNG project is arguably not having a golden moment at eight months behind schedule and some $2 billion over budget. Owners QatarEnergy and Exxon Mobil Corp. have begun damage control.
Paisie: OPEC+ Will Be Able to Manage Prices
2024-07-11 - Disappointing economic news has contributed to a drop in oil prices.
TotalEnergies Joins Ruwais LNG Project in UAE
2024-07-11 - French energy giant TotalEneriges joined the two-train 9.6 million tonnes per annum Ruwais LNG project in the United Arab Emirates with a 10% interest. The LNG project is expected to start sending out cargos in the second half of 2028.