Mexichem Leads Gains as Buying Spree Expands to U.S.Adam Williams
Mexichem SAB rose the most among major Mexican stocks after agreeing to buy a U.S. company that would give Latin America’s biggest plastic pipe maker a foothold in telecommunications supplies as its expands globally.
The shares jumped 2.6 percent to 56.92 pesos in Mexico City, the steepest rise in the country’s benchmark index, which climbed 0.5 percent. The average gain today among 15 of Mexichem’s global peers tracked by Bloomberg was 0.7 percent.
Mexico’s most acquisitive company over the last decade has reversed share declines this year amid another spate of purchases and joint ventures. Mexichem agreed to buy Knoxville, Tennessee-based Dura-Line Corp. for $630 million in cash and debt, it said in a regulatory filing today. Dura-Line makes high-density polyethylene tubes and pipes for telecom, energy and infrastructure industries and has plants in North America, India, Oman, Europe and South Africa.
That presence “will give us a growth platform for new geographical regions for all of Mexichem’s products,” Chief Executive Officer Antonio Carrillo said in today’s statement.
Mexichem has acquired 17 companies since 2007 and agreed to buy German chemical maker Vestolit GmbH from Strategic Value Partners LLC for 219 million euros ($293 million) on Aug. 5, a move deemed credit positive by Moody’s Investors Service.
Controlled by billionaire Antonio del Valle, Mexichem has negotiated 21 acquisitions since 2004. It will hold a conference call to discuss the Dura-Line deal on Aug. 20