Chemical M&A Activity Rises

Global chemicals M&A deal value rose 13% last year and is expected to increase in 2015, according to the fourth edition of the Chemicals Executive M&A Report by AT Kearney, a global management consulting firm. The global survey of chemical executives and members of the M&A community showed that 60% of these chemicals executives see increased mergers and acquisitions in 2015, driven by portfolio restructuring and an overall focus on companies’ core businesses.
 
“Focus on the core business is a key driver of M&A in Chemicals today as strategic owners work to restructure their portfolios and acquire complementary targets while activist investors push for increased corporate transparency and focus,” said Andy Walberer AT Kearney partner and co-author of the report.
 
Looking at North America chemical deals in 2014, deal value grew by 16% and transactions grew by 24% with seven of the top 10 transactions involving buyers or sellers focused on improving their core businesses.  Notable divestitures included Ashland’s sale of its water technology business, Philipps 66’s divestment of its flow improver business, and CF Industries’ divestment of its phosphate business.
 
Commenting on the findings of the study, Guttorm Aase, A.T. Kearney principal and co-author of the Chemicals M&A Executive Report noted, “North America is projected to maintain a dominant share of chemicals mergers and acquisitions in 2015. However, China will be the strongest growth region for chemicals M&A activity in 2015, driven by further consolidation of the local market as well as an increase in geographic expansion and inbound international investments in the China market.”