US chems rush to close M&A deals by year end - banker

17 November 2010 22:54  [Source: ICIS news]

NEW YORK (ICIS)--Sellers of chemical assets in the US are rushing to close deals by the end of the year to avoid potential tax hikes, an investment banker said on Wednesday.

“There’s a big glut of deals waiting to get done by year end in the US – it’s a tax-driven situation,” said Chris Cerimele, director and head of chemicals at US-based investment bank Houlihan Lokey, in an interview with ICIS.

“Because of that focus on closing deals before the end of the year, the near-term pipeline of new transactions for next year is relatively soft. Activity in the first quarter of 2011 is likely to be lower than in the fourth quarter of 2010,” he added.

The Bush administration’s tax cuts are set to expire at the end of 2010. While these cuts could be extended, sellers aren’t taking any chances, the banker noted.

For 2011, Cerimele said he expects a solid year, driven by many positive factors.

“2011 has the potential to be a better year because corporations have a lot more cash from solid operating performance, and there are no indications that the financial markets will worsen,” he said.

In addition, chemical companies will continue to seek to divest non-core assets, said the banker.

“There is still plenty of room for companies to consider divestitures – that kind of activity will remain steady,” said Cerimele.

“Many corporations would have liked to trim their portfolios in 2008–2009, but weren’t able to, and are now trying to take advantage of the improved market,” he added.

To discuss issues facing the chemical industry go to ICIS connect
Paul Hodges studies key influencers shaping the chemical industry in Chemicals and the Economy


By: Joseph Chang
+1 713 525 2653



AddThis Social Bookmark Button

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

ICIS news FREE TRIAL
Get access to breaking chemical news as it happens.
ICIS Global Petrochemical Index (IPEX)
ICIS Global Petrochemical Index (IPEX). Download the free tabular data and a chart of the historical index