Global chems complete $15bn in deals in H1 2007

08 August 2007 18:26  [Source: ICIS news]

By Joseph Chang

NEW YORK (ICIS news)--The global chemical industry completed $15bn (€11bn) in deals in the first half of 2007 but has a 50-50 chance of breaking last year’s record of $42bn, said one investment banker on Wednesday.

“At least three large chemical deals totalling $30.9bn were announced in July and are expected to close in 2007, raising the possibility that 2007 will surpass 2006’s record dollar volume,” said Peter Young, president of New York-based investment bank Young & Partners. “However, debt issuance risk in funding these deals is significant.”

The big three deals are Basell/Lyondell, Hexion/Huntsman and SABIC/GE Plastics, all of which depend on debt financing, which is increasingly harder to come by with the crisis in the credit markets, noted Young.

“All debt-financed deals are vulnerable to some extent,” he said. “The likelihood that all three get done before the end of the year is low. It’s more likely that two out of three will be completed.”

As of the end of July, there was a total of $56bn in announced chemical deals that have yet to close.

The number of transactions over $25m in size completed in the first half totalled 39, on pace to match the 78 deals done in 2006, said Young & Partners.

Cross-border deals accounted for 69% of the total, up from 55% for all of 2006, according to the investment bank. Targets in Europe accounted for 51% of the deals, with the US coming in at 23% and Asia/rest of the world at 26%.

($1.00 = €0.73)

Look for further analysis of the M&A market in the 20 August issue of ICIS Chemical Business.

 

By: Joseph Chang
+1 713 525 2653

< previous article(VIDEO - ICIS news Asia Lunchtime Bulletin 4 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