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The estimated total volume of cathode materials would be enough to make batteries to power about 5 million high-performance electric vehicles

South Korea’s LG Chem 051910 0.22%increase; green up pointing triangle has signed a $19 billion deal with General Motors GM 0.64%increase; green up pointing triangle to supply cathode materials used to make electric-vehicle batteries.

The South Korean chemical company said in a press release Wednesday that it will supply 24.750 trillion won ($18.65 billion) worth of cathode materials to GM from 2026 through 2035.

LG Chem plans to supply the U.S. auto giant with around 500,000 metric tons of cathode materials, which will be produced at its plant currently being built in Tennessee, according to the statement.

The estimated total volume of cathode materials would be enough to make batteries to power about 5 million high-performance electric vehicles, it said.

The South Korean company broke ground on the Tennessee plant in December 2023, which will produce 60,000 metric tons of cathode materials annually starting from 2026.

UK housebuilder aims for £90mn in cost savings as developers deal with slowdown

Barratt has reached a £2.5bn deal to buy rival Redrow, creating the UK’s largest housebuilder, as developers weather the property market downturn. 

The boards of both FTSE housebuilders have recommended that all-share combination, which they said would combine complimentary brands and achieve significant cost savings. 

The offer by Barratt, already one of the country’s largest developers, comes as both companies navigate a brutal downturn in new homes sales caused by higher mortgage rates squeezing prospective buyers. 

Housebuilders across the country have cut costs and slowed land buying as their profit and output plummet. Wednesday’s deal marks the first move to consolidate by two big national developers since the market soured. Vistry struck a £1.25bn deal to buy Countryside in 2022. 

Barratt chief executive David Thomas, who would lead the combined group, said the deal would “bring together two highly complementary companies, creating an exceptional homebuilder”.

The companies said the Redrow brand, which focuses on larger, high-quality homes for more affluent buyers, would continue as part of Barratt, which already operates the David Wilson Homes brand alongside Barratt Homes. Redrow chief executive Matthew Pratt will continue to lead the brand and join the board. 

The combined group would be renamed Barratt Redrow plc and build roughly 22,000 homes a year, based on the two companies’ current performance. 

Steve Morgan, founder of Redrow and still its largest shareholder with a 16 per cent stake, has agreed to support the deal. Morgan said he hoped the larger group will “accelerate the delivery of much needed homes across the UK”.

The terms of the deal, which still have to be approved by shareholders, offer a 27 per cent premium over Redrow’s Tuesday closing share price.  

Barratt on Wednesday announced that its adjusted profit before tax dropped 70 per cent to £157mn and its output fell 28 per cent to 6,171 homes in the six months to the end of December. Redrow also reported a major slowdown in trading.

Wind developer says moves needed to create ‘leaner and more efficient company’

Wind developer Ørsted is axing its dividend, cutting jobs and exiting several offshore wind markets as it tries to shore up its balance sheet and refocus following a troubled year. 

The world’s largest offshore wind developer, which is 50.1 per cent owned by the Danish state, said it would “pause” dividends for 2023-2025, cut 600-800 jobs around the world and exit offshore markets including Norway, Spain and Portugal. 

About 250 workers are expected to lose their jobs in coming months. Mads Nipper, president and chief executive, said the moves were needed to make Ørsted a “leaner and more efficient company”. 

Ørsted is trying to restore confidence after shares tumbled last year as it abandoned two US offshore wind projects because of rising costs, and it recorded higher than expected impairments.

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Companies spent two months discussing a merger that aimed to capitalize on the rising demand for natural gas resulting from the war in Ukraine

SYDNEY—Woodside Energy WDS 0.53%increase; green up pointing triangle and Santos STO -5.84%decrease; red down pointing triangle have ended talks over a merger that could have created a gas company worth some $57 billion, representing a rare setback in the global energy sector, where producers have been rushing to do deals.

Woodside and Santos spent two months discussing a merger that aimed to capitalize on the rising demand for natural gas resulting from the war in Ukraine. With interests in gas-export projects in Australia and Papua New Guinea, the two companies appeared well placed to take advantage of any prolonged pause in approvals for new plants to export U.S. liquefied natural gas.

“While the discussions with Santos did not result in a transaction, Woodside considers that the global LNG sector provides significant potential for value creation,” Woodside Chief Executive Meg O’Neill said Wednesday.

Energy companies have been doubling down on fossil fuels in a bet that the world will continue to have an appetite for oil and natural gas for decades, even as many nations are seeking to cut emissions and move toward green energy. In October, Exxon Mobil agreed to buy Pioneer Natural Resources for about $60 billion, while Chevron said it would acquire Hess for $53 billion.

Other companies have sought to get bigger to take advantage of the Ukraine war, which is reshaping the map for global natural-gas supply. The Biden administration’s decision late last month to effectively freeze the approval process for LNG exports further underscores the importance of plants already in operation.

Talks over a merger with Santos had helped to lift Woodside’s shares from a 16-month low in early December, and the stock has risen around 9% since then. Analysts said a merger could have increased Woodside’s earnings even if the Perth, Australia-based company had paid a 20%-30% premium for control of its smaller rival. Being bigger would have enabled Woodside to reduce debt costs and expand its trading business, although combining its Australian assets with those of Santos could have created domestic competition concerns, they said.

“Following an initial exchange of information, sufficient combination benefits were not identified to support a merger that would be in the best interests of Santos shareholders,” Santos said.

For many investors, natural gas holds appeal as a fuel that can help the power sector to bridge the time it will take from ending coal use to relying heavily on renewables.

In a report published in October, the International Energy Agency said the LNG market balance would likely remain precarious in the near term. New LNG projects, however, could add 250 billion cubic meters a year of liquefaction capacity by 2030, equal to almost half of today’s global LNG supply, the IEA said.

Woodside, already Australia’s 10th-largest company by market capitalization, operates assets throughout Australia as well as international projects including in the Caribbean and the majority owned Shenzi oil-and-gas field, about 120 miles off the coast of Louisiana. It plans to invest $5 billion in new energy projects by 2030, including a proposed hydrogen project in Oklahoma.

The moves are part of Beijing’s efforts to strengthen its EV and automobile industry market share by increasing exports of its EV and hybrid vehicles

China is encouraging its electric vehicle makers to expand their overseas presence, including forging tie-ups with foreign research institutions and countries to build industrial clusters.

Companies are encouraged to establish research & development centers overseas and collaborate with shipping companies to integrate warehousing and logistics resources in foreign markets, the Ministry of Commerce said in a statement on Wednesday.

The ministry said it would optimize credit support by encouraging banks to support EV supply chain companies domestically and overseas financially. Banks will also be encouraged to expand the scale of cross-border settlements in yuan.

The moves are part of Beijing’s efforts to strengthen its EV and automobile industry market share by increasing exports of its EV and hybrid vehicles. China’s BYD, the Warren Buffett-backed company, had recently surpassed Tesla to become the world’s largest EV maker by sales after it sold almost five times 242,000 Units in 2023. It is expanding showrooms across Europe as it targets more sales there this year.

Industry organizations are also encouraged to strengthen research on overseas markets and guide new energy vehicles and their supply chain companies to optimize international cooperation based on market size, trade potential, consumption structure, and country risks. the ministry said.

Chinese EV shares are mixed in Hong Kong trade on Wednesday, after an overnight rebound in the U.S. At midday BYD shares were up 2.4% while Li Auto and Xpeng were 0.1% and 0.45% lower in Hong Kong, respectively.