Mitsubishi Rayon Closer to Completing Lucite International Acquisition

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Researched by Industrial Info Resources (Sugar Land, Texas)--After months of delays, it appears Mitsubishi Rayon Company Limited (TYO:3404) (Tokyo, Japan) is nearing completion of its planned acquisition of Lucite International Limited (Southampton, United Kingdom). Originally announced in November of 2008, this $1.6 billion transaction has recently been approval by the Ministry of Commerce in Beijing. If completed as expected in the next few weeks, the acquisition would include 14 manufacturing sites and nearly 2,000 employees.

Lucite International is a leader in methyl methacrylate (MMA) monomers, one of the main ingredients in the production of acrylic resins. Lucite currently has plans to build two more MMA plants in both China and Saudi Arabia in the next few years. Plans for this new capacity come even as some MMA capacity has been offline in recent months because of regional drops in demand. Lucite's MMA unit, located in Nederland, Texas, has been idle since January, although it is expected to restart soon. This is believed to be the only unit not currently operating at the site, although most are running at reduced rates.

Industrial Info, as part of its North American International Database, is currently tracking nearly $600 million in future and ongoing capital and maintenance projects planned by Lucite International and Mitsubishi Rayon. As a result of this acquisition, Mitsubishi Rayon will become a world leader in MMA production and further increase its global presence.

As financial markets have struggled around the world, this is not the only acquisition that has been faced with troubles or concerns of being undervalued. Recently CF Industries Holdings Incorporated (NYSE:CF) (Deerfield, Illinois) attempted to acquire Terra Industries Incorporated (NYSE:TRA) (Sioux City, Iowa) but was rejected, because Terra felt it was undervalued. Then, in an interesting twist, Agrium Incorporated (NYSE:AGU) (Calgary, Alberta) attempted of buy CF Industries and was rejected for the same reason. Until some noticeable health returns to global markets, mergers and acquisitions will continue to present unique challenges.

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