In 2015, the global chemical M & a market continued its strong momentum
in 2015, the global chemical M & a market continued its strong momentum
January 7, 2015
[China paint information] in the past year, the total amount of global chemical bulk M & A transactions (each with a transaction amount of more than US $25million) is estimated to exceed US $40billion, and the number of completed transactions is close to 90. In the first three quarters of 2014, the volume of global chemical bulk M & A transactions reached US $30.9 billion, equivalent to the volume of transactions in 2013. In the first three quarters of 2014, the global chemical industry completed 64 large-scale mergers and acquisitions to make laso3 toughened MoSi2 composites, compared with 59 transactions completed in the same period of 2013, an increase of 8% year-on-year. Will the new year's chemical M & a market continue the strong momentum of 2014? Both investment banks, corporate investors and even the CEOs of chemical enterprises expect that the activity of M & A transactions in 2015 will increase unabated compared with that in 2014
investment banking: chemical M & A has a strong momentum. Peter young, chairman of young partners, an American investment bank, said recently: "the activity of global chemical M & A transactions has increased significantly since the second half of 2014 and will continue until 2015. Potential demand growth and sufficient cash flow have been driving the business M & A activities of strategic buyers, and the easy access to low-cost debt financing will continue to promote the business M & A activities of financial buyers."
most investment banks believe that global chemical M & A transactions will continue to perform strongly in 2015 due to the impact of strategic buyers and private equity buyers seeking M & A opportunities. Substantial improvements in corporate balance sheets and easy access to low interest rate financing are supporting higher transaction valuations. With the increasing uncertainty of the global overall economic outlook, how to achieve growth of chemical enterprises has become the focus of the industry, and maintaining the profitability of enterprises through mergers and acquisitions has become a hot topic
telly zachariades, partner of Wallace group, an investment bank, said: "many factors are contributing to the unusually strong growth of the chemical M & a market. The data of the assets that have been announced and are expected to be sold in the market indicate that the M & a market will perform strongly in the first half of 2015."
Bernd Schneider, general manager and head of chemical business of investment bank n+1 company, said: "We expect that the strong momentum of global chemical M & A transactions will continue in 2015. On the one hand, the overall liquidity of the market is good and financing is easy to obtain; on the other hand, strategic buyers and financial investors are actively seeking chemical business M & A opportunities. The owners of chemical assets will pay close attention to the current attractive valuation level to make the final strategic choice."
CEOs of chemical enterprises: the confidence index of M & A has increased.
investment bank survey shows that the confidence index of CEOs of chemical enterprises in implementing M & A transactions is growing, especially the CEOs of American chemical enterprises
Leland Harris, general manager and head of chemical business of Huali anoki investment bank, said: "at present, the balance sheet of chemical enterprises has been greatly improved. Chemical enterprises are now full of confidence in the way of business growth through business mergers and acquisitions."
telly zachariades, partner of Wallace group, said: "CEOs of chemical enterprises are more confident about M & A transactions. Shareholders have taken a positive attitude to support the growth of chemical enterprises through business M & A."
for this phenomenon, Toukan of keybanc explained: "for enterprises, the main problem is how to achieve business growth. In the past year, the global chemical market has only increased by 2%. Facing this situation, CEOs of chemical enterprises pay more attention to business mergers and acquisitions."
investors: "catalytic" business divestiture
tell zachariades of Wallace group said: "global chemical enterprises are continuing to actively restructure their businesses, sometimes spontaneously, and sometimes driven by pressure from active investors. Active investors usually act as catalysts for chemical enterprises to accelerate or stimulate restructuring."
insiders said: in fact, active investors have become a major force to promote the asset sale and business divestiture of chemical enterprises, especially in the US chemical industry. Active investors have targeted Dow Chemical, DuPont, Ashland, ferro, American Pacific, air chemicals, Calgon carbon, MeadWestvaco, innophos and Omnova solutions
toukan of keybanc company said: "in the past 18 months, we have seen that active investors have promoted the business restructuring of chemical enterprises more than the sum of the past 10 years."
under the pressure from active investors, Dow Chemical is divesting its chlor alkali and derivatives business, and raising its asset divestiture target from US $4.5 billion to US $6.0 billion by the end of 2015 to US $7 billion to US $8.5 billion by the middle of 2016. In december2014, Dow Chemical agreed to sell its additive and intermediate manufacturer Angus Chemical Co., Ltd. to private equity company Golden Gate capital at a price of US $1.2 billion, while selling its sodium borohydride business to vertellus special materials Co., Ltd. at a total price of US $225million, and selling its polyolefin film device in Ohio to valgroup packaging solution Co., Ltd. for 10 flat sample holding width: 70mm
DuPont plans to divest its performance chemicals business unit by the middle of 2015. This division includes the world's largest titanium dioxide business. In December, 2014, Ashland company completed the transaction of selling its elastomer business to lion copolymer company
omnova solutions is becoming the target of active investor Burlington capital. Burlington capital is promoting Omnova solutions to sell the manufacturing enterprise doors of tensile machines and sensors of its engineering surface business department, including decorative parts and functional surface businesses in the construction and automotive fields
telly zachariades, partner of Wallace group, said: "For active investors, chemical companies are relatively easy to catch. They can easily find chemical companies with multiple business units. These business units are usually cyclical, or tend to be large-scale, or low growth. Then active investors will ask the board of directors of chemical companies to divest these businesses. In 2015, we will still see more active investors promote chemical companies Business divestiture. "
uncertain factors: Geopolitics in the financing market
while the industry is optimistic about the global chemical M & a market in 2015, wood plastic composite is an environmentally friendly new material that has risen and developed rapidly in recent years, it also maintains a calm attitude
mario Toukan, head of chemical investment business of keybanc capital markets, said that the global chemical M & a market would remain active in the first quarter of 2015, and some new transactions would follow. But potential sellers feel a little uneasy, because the financing market has shown preliminary signs of weakness. Sellers who want to sell chemical assets will speed up the sale process
peter Young said that tense geopolitics and poor global economic prospects are bringing uncertainty to the future demand for most chemicals. Schneder, n+1 company, said: "the biggest risk in the chemical M & a market is the escalation of geopolitical risk in Ukraine, Russia, North Africa, Thailand, Israel/Gaza and Turkey. Because the chemical industry is one of the industries with the highest degree of globalization, the geopolitical risk in some regions will have a negative impact on the whole industry."