Industry Analysts Note Consolidation Slow-Down
10 June 2008 A new report from analysts PriceWaterhouseCoopers (PWC) found that mergers and acquisitions in the international chemicals industry have slowed considerably this year.
According to PWC data, the first quarter of 2008 saw transactions to the value of only US $11 billion, less than half the average quarterly figure for last year, which was around $28 billion. Although PWC points out that this quarterly figure may not be repeated for all of 2008, far fewer mergers and takeovers are expected this year than last, when the value of transactions was around $112 billion.
PWC believes this development is related to the international financial markets crisis, particularly in the case of large-scale takeovers. In this area, only strategic investors have been getting in on the act, such as chemicals groups aiming to strengthen themselves in a targeted manner.
A glance at the takeovers in the first quarter of 2008 also shows that the balance of power in the global economy has shifted: half of all buyers are from the Asia-Pacific region. Examples include the Indian chemicals group Tata Chemicals, which has acquired its American competitor General Chemical. Almost one-third of the transactions went to buyers from the Middle East, mainly in the petrochemicals sector.
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