The pattern of global chemical M&A transactions has changed

Recently, as the global epidemic has eased, global chemical mergers and acquisitions have become active again
.

Compared with M&A transactions before the epidemic, the recent global chemical M&A transaction market presents the following new characteristics: developing countries, especially Southeast Asian companies are accelerating their pursuit of internationalization and actively participating in cross-border mergers and acquisitions; private equity companies actively and flexibly participating in chemical mergers and acquisitions Transactions: The non-chemical infrastructure of chemical companies is becoming a new sought-after asset in the chemical M&A transaction market

Accelerated M&A in Southeast Asia

Southeast Asian corporate mergers and acquisitions accelerate Southeast Asian corporate mergers and acquisitions

Federico Menella, managing director and co-head of the global chemical and materials business at Rothschild recently pointed out that in terms of transaction volume, Asia’s share of global chemical mergers and acquisitions has reached about 30%.
, And even higher in the number of transactions
.

He said: "Recently, the proportion of cross-border M&A transactions involving Asian companies is increasing

Thailand's Indorama is the most active market participant recently
.

In mid-June this year, Indorama of Thailand completed the acquisition of the polyethylene terephthalate (PET) recycling plant of CarbonLite of the United States in Dallas for US$63.

Of course, Asia is still an attractive market for American and European buyers
.

On June 30 this year, Lyondell Basel announced the acquisition of Malaysia PolyPacific Polymers

Private equity firms actively participate

Private equity firms actively participate in private equity firms

Mennella said that recent private equity firms have shown more flexibility in conducting mergers and acquisitions
.

For example, the European private equity firm Ardian acquired 50% of the ANGUS chemical company from Golden Gate Capital of the United States, and Bain Capital and Cinven acquired the specialty materials business of the Lonza Group for 4.

The success of private equity firms in chemical mergers and acquisitions has attracted many new players into the field
.

Menella said: "Ten years ago, there were far fewer private equity companies specializing in chemical M&A transactions

　　Many chemical companies also actively participate in the financing of private equity companies and provide private equity companies with industry knowledge and contacts
.

Mennella pointed out that, for example, Japan's Mitsubishi Group has both investment institutions and Mitsubishi Chemical Holdings, Japan's largest chemical company

　　Non-chemical infrastructure is in demand

Non-chemical infrastructure is very popular Non-chemical infrastructure is very popular

　　Menella said that the non-chemical infrastructure of large chemical companies is also very popular recently
.

This is a new situation

　　Recently, Dow Chemical obtained approximately US$1 billion in cash by selling rail and port assets in six North American regions to Watco and Vopak Industries
.
Dow divested this part of the assets nominally, but can still continue to use these infrastructures
.
Jim Fitling, CEO of The Dow Chemical Company, said in a statement that the transaction is part of an assessment of the Dow Chemical Company’s “non-product production assets” in an effort to develop its core business and release cash to repay debt.
, You can also use cash for value-added opportunities in your core business
.
On July 1st of this year, Nova Chemical of Canada announced the sale of its ethylene storage and trading business to the US Midstream Corporation Enterprise Products Partnership, enabling it to focus on the core business of ethylene and polyethylene production
.
In this regard, Mennella said: “Chemical companies still have the opportunity to divest infrastructure assets, which can be transferred to infrastructure funds and other professional companies in the field, while chemical companies can obtain more money without affecting the production order.
More cash
.
"