US chem firms see major mergers, acquisitions in '11 - AlixPartners

23 November 2010 19:32  [Source: ICIS news]

NEW YORK (ICIS)--Around 42% of US chemical companies expect to be involved in major mergers and acquisitions (M&A) activity in the next 12 months, business advisory firm AlixPartners said on Tuesday.

According to a survey conducted by AlixPartners of 88 US chemical CEOs, presidents and other senior-level executives of chemical producers and distributors, 42% of respondents said they think it’s either “very” or “somewhat” likely their companies would be involved in a major acquisition, merger or takeover in the next 12 months.

The 88 executives surveyed were from US-based companies with at least $50m (€37m) in annual sales.

For executives from large chemical companies, defined as having over $1bn in annual revenues, that figure was 54%.

“Last year, there was a tremendous focus on cost reduction and belt-tightening. But today the focus has swung back to growth and M&A,” said Bob Sullivan, managing director of AlixPartners and co-lead of the firm’s Global Chemical Industry Practice, in an interview with ICIS.

“Companies have more access to financing and are operating with leaner costs,” he added.

And 53% of all respondents also expect their companies to reach pre-recession-level revenues by the end of 2010, noted the firm.

“As in chemistry itself, coming up with the right mix of elements to spur growth in the chemical industry - be it organic growth or acquisitive growth - is a delicate balance,” said Mike Sinoway, managing director of AlixPartners and leader of the firm’s Global Growth Services Practice.

“And achieving that right balance is nearly impossible without crystal-clear visibility into both your market and inside the operations of your own company,” he added.

($1 = €0.73)

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By: Joseph Chang
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