Polyethylene Wax, Nobel Prize in Chemistry, and Partially Renewable Chemicals

Mergers and Acquisitions:

SK Capital Closed their acquisition of the Baker Hughes Specialty Polymers business this week. They will be rebranding the business as NuCera Solutions and a leadership change will also occur Steve McKeown being appointed as CEO and Shawn Ham as the CFO. Baker Hughes was always focused on providing goods and services to oilfield sites and there has always been some need for polymers and chemicals in oilfield operations. NuCera originally started as “Bareco Oil Company” in 1934 and was known for selling microcrystalline waxes into oilfields and it was eventually absorbed into the larger conglomerate of Baker Hughes. NuCera’s product line may have originally been complementary to the Baker Hughes’ business, but the foundation technology of polyethylene waxes and similar products has expanded into other end markets such as adhesives, coatings, plastics, and personal care. The press release can be read here.

Shareholder Value

Does it make sense for an oilfield technology company to be making polymers designed to go into personal care products, polyolefin extruders, or adhesives? SK Capital and the shareholders of Baker Hughes didn’t think so either. In this era of chemical businesses being highly specialized the general consensus seems to be that shareholder value is enhanced with a less diverse business. In the Baker Hughes case as the future of oil is murky due to acceleration…