Global chemical M&A activity declined in the first quarter

[China Epoxy Network (China Epoxy Industry Online)May 22, 2009: Global chemical M&A activity declined in the first quarter.
The latest research report of PricewaterhouseCoopers of the United States shows that due to factors such as declining market liquidity and weak demand, the activity of large-scale global industrial M&A transactions has dropped sharply in the first quarter of this year.
The value of global industrial M&A transactions in the first quarter fell by 30% from the fourth quarter of last year, and fell by 55% from the first quarter of last year.
This result is inconsistent with PwC’s expectations at the beginning of this year, when it predicted that, stimulated by low-cost infrastructure, the value of global industrial international M&A transactions will increase in 2009.
According to PricewaterhouseCoopers, there were a total of 143 M&A transactions announced by Global Industries in the first quarter, a decrease of 31% from the fourth quarter of last year and a 7% decrease from the first quarter of last year.
There were only 58 M&A transactions.
PricewaterhouseCoopers' global chemical business director said: The three major factors of high financing costs, shrinking credit markets and the global economic downturn continue to have an adverse impact on globalized industries.
Chemical companies are particularly worried about the continued downturn in the automotive industry, because the automotive industry is an important end market for many plastic manufacturers.
Chemical customers have said that the adverse impact of the automotive industry downturn on them is far greater than the initial estimate, and the structural adjustment of the automotive industry is forcing them to make corresponding structural adjustments in the product supply chain.
Despite concerns about the economic outlook, the average value of global industrial M&A transactions increased in the first quarter of this year, from US$148 million per transaction in the fourth quarter of last year to US$176 million per transaction in the first quarter of this year.
PricewaterhouseCoopers stated that small mergers and acquisitions will become the mainstream of global industrial mergers and acquisitions.
In the first quarter of this year, Asia became the main battlefield for global industrial mergers and acquisitions.
In the first quarter, the number of chemical mergers and acquisitions in Asia accounted for about 45% of the world; North America ranked second, accounting for 33%.
PricewaterhouseCoopers stated that the substantial increase in the number of chemical M&A transactions in Asia in the first quarter was mainly due to China's contribution.

(Our reporter Liang Xi)

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