Olin's planned acquisition exposes it to risk - HSBC

06 July 2007 15:31  [Source: ICIS news]

TORONTO (ICIS news)--US-based Olin’s planned $411m debt-financed acquisition of chlor-alkali maker Pioneer is exposing it to more risk, HSBC said in a research note on Friday.

 

The deal came at a time when new North American chlor-alkali capacity could lead to pricing pressures, analysts at the London-based international bank said.

 

The analysts pointed to Shintech’s planned chlor-alkali project in Texas.

 

At the same time, there were question marks over demand as US housing starts remained weak. Housing starts were a large source of demand for downstream chlorine products such as polyvinyl chloride (PVC), the analysts said.

 

The acquistion would, if completed, make Olin the third-largest chlor-alkali producer in North America with about 12% of capacity, after Dow Chemical and Occidental, HSBC said.

By: Stefan Baumgarten
+1 713 525 2653

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