Middle East to boost Europe chem M&A - HSBC

27 June 2007 16:18  [Source: ICIS news]

TORONTO (ICIS news)--Middle Eastern states will increase their role in chemical mergers and acquisitions in coming years, especially in Europe, HSBC said in a research report obtained on Wednesday.

 

The European chemicals industry was a particular target, given its fragmented market structure, the international London-based bank said in the report that was issued earlier this week.

 

Also, ongoing portfolio restructuring and disposals by companies such as Akzo Nobel, Ciba, Clariant and others offered acquisition opportunities for Middle Eastern firms seeking to gain a foothold in specialty chemicals, HSBC said.

 

Saudi Arabia and other member states of the Gulf Cooperation Council (GCC) would use their large oil export earnings to finance M&A deals in chemicals, HSBC said.

 

Also, the region’s feedstock cost-advantaged Middle East chemical majors could deploy strong cash flows from their basic chemicals businesses to grow inorganically, it added.

 

The analysts noted a number of large deals completed by GCC-based companies in recent months, including the acquisitions by SABIC of GE Plastics and Huntsman’s European commodity chemical assets, and the purchase by Tasnee/Cristal of Lyondell’s titanium dioxide assets.

 

“We expect to see a significant increase in the volume of chemical M&A deals by GCC firms over the next few years … we expect the rationale for acquisitions based on market access, diversification into specialty chemicals, and access to technology to strengthen, as more basic chemical projects come on stream in the Middle East,” they said.

By: Stefan Baumgarten
+1 713 525 2653

< previous article(ICIS Podcast: Chemical News Central 2 November 2009)

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly