Breaking News

Industrial Product M&A Activity Rises in 4Q

February 13, 2014

Chemicals industry accounts for six "mega" deals, according to PwC.

Merger and acqusition deal volume and value in the global industrial products (IP) industry rose significantly on a sequential basis during the fourth quarter of 2013, according to a series of quarterly M&A reports released by PricewaterhouseCoopers LLP (PwC US).
 
The increase included a notable gain in mega deals (transactions worth more than $1 billion) compared with the third quarter of 2013, which helped drive total deal value across several IP sectors. In addition, financial investors increased their participation across the majority of M&A market sectors, contributing 36.4 percent to total deal volume in the fourth quarter, the highest in five years.
 
"We witnessed a notable uptick in the overall M&A environment across the global industrial products industry during the fourth quarter, as worldwide business sentiment continued to improve," said Robert McCutcheon, U.S. industrial products leader, PwC. "Despite a recent rise in volatility stemming from instability in several emerging markets and a potential slowdown in China, we may see a positive deal momentum to continue in 2014. As the overall global economic recovery continues to take hold and more established markets transition from stabilization to growth, strategic and financial investors in the IP space will likely look to pursue inorganic opportunities to expand their footprints, fuel innovation and integrate technological know-how to better position their assets for the future."
 
Across the entire IP industry, there were 216 transactions worth $50 million or more, totaling $83.6 billion in the fourth quarter of 2013, compared to 181 deals and $65.3 billion in total value during the previous quarter.
 
The chemicals industry accounted for six mega deals valued at $10.7 billion in the fourth quarter of 2013, compared to only one mega deal worth $1.3 billion in the third quarter.
 
"Financial investors are re-entering the M&A market in the IP industry, reflecting improved sentiment and moderation in perceived risk, particularly in more established global markets. They are tapping into their strong cash positions that are available from recent IPOs and other exits of their investments such that they are able to redeploy their capital into new industrial companies. That interest should continue in the year ahead, given cash on-hand, ample liquidity and the availability of low-cost debt financing," said McCutcheon.
 
Local deals continued to drive M&A activity in the fourth quarter with Asia and Oceana being most active, recording 85 deals worth more than $50 million with a total value of $25.9 billion compared to 60 local deals and a total value of $14.5 billion in the previous quarter. However, there was also an uptick in North American local deal activity in the fourth quarter of 2013 with 50 deals worth $50 million or more totaling $19.5 billion, up from 39 deals with a total value of $11.1billion from the third quarter.
 
"We are continuing to see a moderately improved climate in the U.S. for deal making given the increasing attractiveness of the domestic manufacturing sector. This trend is in line with the results of our most recent Manufacturing Barometer survey, which showed sequential and year-over-year gains in sentiment among U.S. industrial manufacturers regarding the prospects of the domestic economy," said McCutcheon. "Our Barometer also pointed out that the expansion into new markets abroad increased citing plans for new facilities abroad. We expect this to be a continued trend among IP companies for the longer term."
 
PwC's IP M&A analysis is a quarterly report of announced U.S. transactions with value greater than $50 million analyzed by PwC using transaction data from Thomson Reuters.
blog comments powered by Disqus
  • Kitchen Counter Cosmetics

    Kitchen Counter Cosmetics

    Christine Esposito, Associate Editor||May 2, 2016
    LOLI box marks the convergence of natural and organic ingredients, subscription service and DIY cosmetic chemistry.

  • What’s New at La Prairie?

    What’s New at La Prairie?

    Melissa Meisel, Associate Editor||April 25, 2016
    VP of marketing shares the latest buzz with Happi.

  • Mapping Out Multicultural Beauty

    Mapping Out Multicultural Beauty

    April 25, 2016
    Agnieszka Saintemarie of Kline Group about current trends and challenges in multicultural beauty.

  • Erasing the Signs of Aging

    Pauline Rouaud-Tinguely, David Boudier, Sylvain Mazalrey, Jenny Laumonier, Isabelle Cruz, Gu00e9raldine Bon, Karine Perrinet, Bu00e9ranger Tassy, Brigitte Closs, Silab R&D, Saint-Viance, France||May 2, 2016
    Silab researchers explain how by acting on the endogenous hyaluronic acid pathway.

  • I Want It All

    I Want It All

    Melissa Meisel , Associate Editor||May 2, 2016
    Skin care moves beyond the basics with pampering formulations with unique components and novel functions.

  • Wacker Builds on Its Success

    Wacker Builds on Its Success

    Tom Branna, Editorial Director ||May 2, 2016
    The silicone maker had a good 2015 and expects the gains to continue in 2016, driven, in part, by success in the Americas and