IHS Chemical Week


Report: Chemical M&A Value Down

11:08 AM MST | February 19, 2009 | By VINCENT VALK

A PriceWaterhouseCoopers (PwC; New York) report on chemical sector M&A in the fourth quarter found that deal value declined for the quarter and the entirety of 2008. The report noted 13 announced deals with a disclosed value for the fourth quarter, totaling some $6 billion. This figure was considerably lower than anticipated in PwC’s third quarter M&A analysis.

PwC’s fourth quarter manufacturing barometer survey found 32% of respondents expecting M&A within the next year, the same percentage as in the third quarter. PwC’s global CEO survey found that one-third of chemical industry CEOs are planning cross-border M&A within the next year, in comparison to just one-quarter of all CEOs in the survey. However, cross-border transactions in the chemicals industry declined significantly in 2008, with such deals accounting for just 22% of total deal value, down from 75% in 2007 and 58% in 2006.

For all of 2008, PwC reported total deal value of $54 billion, roughly equaling the figure for 2006. While number of deals for 2008 increased slightly, to 869 from 853 in 2007, the report noted that “chemicals industry mergers and acquisitions typically included many small to midsized deals” with undisclosed value. Such deals accounted for the bulk of 2008’s activity, as the number of disclosed-value deals, and the number of deals worth more than $50 million, saw declines from 2007 levels.

To learn more about trends in chemical M&A, keep an eye out for CW’s M&A Outlook cover story, coming in March.

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