specialty-chemicals

By contrast, so-called specialty-chemicals players, with a well-defined end-user market and identifiable focus, are easier for investors to comprehend, and their stock prices reflect that.

Investors See Trouble With Chemicals' Image

The company declined to say how much the contracts were worth, but said its oils can fetch up to $14 a gallon in the specialty-chemicals market—more than three times the price of its algae-based fuel.

Taking the Fuel Out of Biofuels

In ZURICH , Clariant slumped 13% after the Swiss specialty-chemicals firm said it will acquire Sued-Chemie in a deal valued at € 2 billion.

Banks Boost European Stocks

Warren Buffett's Berkshire Hathaway agreed to buy specialty-chemicals company Lubrizol for about $9 billion in cash.

What's News

Solutia soared 8.01, or 41%, to 27.52, after the specialty-chemicals company said it agreed to be acquired by Eastman Chemical in a cash-and-stock deal valued at about $3.38 billion.

Dow Snaps 3-Week Win Streak

Other strong performers included specialty-chemicals concern Johnson Matthey , which rallied 4% after reporting a 19% rise in underlying pretax profit for the fiscal first quarter and saying that its first-half results should be "significantly ahead" of a year earlier.

Banks and Tech Stocks Lift European Markets

U.S.-based Dow, in particular, would benefit from integrating a combined Clariant/Süd-Chemie, whose catalyst and absorbent businesses would complement Dow's electronic and specialty-chemicals division—by far the most profitable unit in the group's portfolio.

Clariant's Süd-Chemie Bid May Exact Too High a Price

So companies like Solazyme Inc., Blue Fire Renewables Inc. and Gevo Inc. are using their technology to create personal-care products and raw materials for chemical companies, betting that the best way to obtain the millions of dollars in capital needed to ramp up fuel production is by entering the higher-margin—but also highly fragmented—specialty-chemicals business.

Taking the Fuel Out of Biofuels

So, as the M&A landscape in the sector heats up, what does this say about other specialty-chemicals makers?

Clariant's Süd-Chemie Bid May Exact Too High a Price

As advanced biofuel companies work toward creating an economically viable alternative to petroleum, some have found an alternative place to sell their product in the meantime: the specialty-chemicals market.

Taking the Fuel Out of Biofuels