N EWS O F T H E W E E K
EVONIK CLOSER TO GOING PUBLIC EUROPEAN SPECIALTIES: A third-party investor may have first crack at buying shares
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ECAUSE OF BETTER than expected profits for
2007, Germany’s Evonik Industries appears to be speeding up plans to sell shares to investors through an initial public offering (IPO). Evonik, which includes the former specialty chemical maker Degussa and other businesses, says results “far
MIXED INTERESTS RAG Foundation controls four varied businesses. RAG Foundation
RAG
Evonik Industries
Coal Mining
Chemicals
Energy
Real Estate
Eight coal mines in Germany
Specialty chemicals
Coal-fired power plants
Residential unit management and ownership
SOURCE: Evonik Industries
exceeded expectations” for the first year under its new name. According to Chairman Werner Müller, Evonik “is fit for the capital markets.” Preliminary results for 2007 showed a 2% increase in sales to $19.7 billion and a 14% increase in pretax earnings to $1.8 billion. Evonik is owned by the RAG Foundation, which was formed in 2007 to manage the exit of RAG Corp. from the coal-mining business by 2018. To do so, the foundation has to sell off Evonik in order to fund its pension obligations. Müller says Evonik’s financial results are encouraging enough that the company wants to push ahead with its plans for an IPO. The foundation had wanted to launch an IPO in the first half of this year, but sluggish market conditions persuaded managers to postpone it. According to the quarterly IPO Sentiment Indicator compiled by the German stock exchange, however, prospects are still gloomy for IPOs. In March, the IPO sentiment hit the lowest level since introduction of the survey in 2005, and it does not appear to have improved markedly in the past two months. That IPO outlook might explain why the RAG Foundation is considering placing the first batch of shares with a third-party investor. Five private-equity investors are in the running to buy them: Blackstone, Bain Capital, CVC Capital Partners, and a partnership of investor Kohlberg Kravis Roberts and private bank Sal. Oppenheim. The foundation is not obligated to retain a stake in Evonik but says it plans to hold about 25% of the company on a long-term basis.—PATRICIA SHORT
HONEYBEE LOSS
the pesticide clothianidin, which is produced by Monheim, Germany-based Bayer CropScience and was approved for use in Germany in 2004. The pesticide was AGRICULTURE: Germany suspends approved for use with some restrictions in the U.S. in use of clothianidin after the pesticide 2003. Clothianidin is a neurotoxin, specifically interferis linked to honeybee deaths ing with insect acetylcholine receptors. Although the pesticide is toxic to bees, clothianidin was approved because bees were not expected to have any contact FEW WEEKS after honeybee keepers in the with clothianidin-coated seeds under soil, says Stefanie southern German state of Baden Württemberg Hahn, a spokeswoman for JKI. reported a wave of sudden honeybee deaths, This year, however, corn seeds were coated with federal authorities have ordered a suspension on the more than double the normal amount of clothianidin sale and trafficking of clothianidin-based pesticides. to counteract a corn beetle infestation in “It can unequivocally be concluded Baden Württemberg, Hahn notes. The that a poisoning of the bees is due to the N Cl H extra pesticide coating, as well as use of rub-off of the pesticide ingredient cloS N N sowing machinery that shoots seeds into thianidin from corn seeds,” notes a press NO2 the ground, probably led to the release release from the Julius Kuehn Institute NH H3C and spread of clothianidin dust to nearby (JKI), the German federal agricultural blooming flowers that bees pollinate, she research agency. Clothianidin says. “Beekeepers in the region started “We are saddened by the loss of the bees,” notes a finding piles of dead bees at the entrance of hives in Bayer CropScience statement. “Bayer CropScience is early May, right around the time corn seeding takes keen to establish a certification system in cooperation place,” says Walter Haefeker, president of the Eurowith seed companies, in order to avoid incorrect use of pean Professional Beekeepers Association. seed treatment products in the future.”—SARAH EVERTS To protect seedlings, corn seeds can be coated with
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S H U T T E RSTO C K
Clothianidin is blamed for death of German honeybees.
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