© Reuters
By Geoffrey Smith
Investing.com — Brenntag (ETR:) stock rose strongly on Tuesday after the world’s largest chemicals distributor said it had ended preliminary talks to merge with its smaller U.S. rival Univar (NYSE:).
By 04:00 ET (09:00 GMT), Brenntag stock in Frankfurt was up 5.5%, the best-performing stock in the benchmark .
Brenntag had said in November it had entered into preliminary discussions with Univar over a combination, but said in a brief stock exchange statement on Tuesday that it had decided not to continue the talks. Its stock price fell as much as 18% over the next month as investors fretted about the potential cost of an acquisition, which coincided with fears of another bout of Chinese economic weakness due to rising COVID-19 cases.
Univar’s stock is still around 10% higher than it was before Brenntag’s announcement regarding the talks in November, and may consequently come under pressure when the U.S. premarket session begins later.
European stocks more broadly extended their gains in early trading on Tuesday, supported by signs that the continent’s energy crisis is past its most acute phase. Benchmark , a key input for the chemicals industry in which Brenntag is active, hit their lowest level since Russia’s invasion of Ukraine in February in the first trading session of 2023, and fell another 4.1% in early trading on Tuesday. Other German chemicals groups, such as Covestro (ETR:) and BASF (ETR:), also rose over 2%.
Be the first to comment