12 November 2010 17:53 [Source: ICIS news]
By Joseph Chang
NEW YORK (ICIS)--Global chemical mergers and acquisitions (M&A) activity is expected to be strong in 2011 after a much-improved 2010, an investment banker said on Friday.
“The current M&A market is strong and the outlook is very positive for 2011,” said Peter Young, president of US-based chemical and life science investment bank Young & Partners.
“Only a drop into another economic recession or a major hit to the financial system will prevent this improvement in chemical M&A in 2011,” he added.
Already through the first three quarters of 2010, the global chemical market closed $32bn (€23bn) in deals on an equity basis, exceeding the $25bn for all of 2009, according to Young & Partners.
And the number of completed deals over $25m in size through the third quarter rose to 32, exceeding the 25 booked for all of 2009.
“M&A activity through the third quarter has jumped far beyond last years totals in both dollar volume and number of deals, and may, by the end of the year, equal or exceed the totals for 2008,” said Young.
“This is supported by the fact that there is a strong backlog of deals that have been announced and are moving to a close,” he added.
The improvement in the M&A market has been driven by improvements in the economy and the availability of financing, a return to solid earnings, and a subdued threat of a double-dip recession, the banker noted.
“The greater availability of financing was particularly beneficial to the financial buyers who have come back strongly starting in the second quarter of this year,” said Young.
($1 = €0.73)
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