InterviewGlobal chemical M&A to remain strong in 2011 – US banker

11 February 2011 19:18  [Source: ICIS news]

Chemical M&A market will be active in 2011By Joseph Chang

NEW YORK (ICIS)--Global chemical mergers and acquisitions (M&A) activity will continue to be strong in 2011 after surging in 2010, one US investment banker said on Friday.

“We expect 2011 to be another active year for chemical industry M&A and will likely match or exceed 2010 volumes – both in terms of number of deals and dollar volume,” said Peter Young, president of US-based chemical and life sciences investment banking firm Young & Partners.

He also expects the Asia and rest-of-the-world category to continue to lead as the most active M&A market, ahead of the US and Europe.

In 2010, $36bn (€27bn) in chemical deals were completed on an equity basis – up sharply from a trough of $25bn in 2009, according to Young & Partners.

Even more significantly, the number of completed deals over $25m in size jumped to 64 versus 26 in 2009, noted Young.

“This is being driven by the overall stability of the global economy, an increase in buyer confidence, the ready availability of debt financing and the need to begin using the cash stockpile that companies have amassed,”  said Young.

“In addition, the backlog of deals announced but not yet closed is also quite high,” he added.

Transaction valuations have risen sharply off 2009 trough levels in both commodity and specialty chemicals, noted Young.

($1 = €0.74)

Paul Hodges studies key influencers shaping the chemical industry in Chemicals and the Economy
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By: Joseph Chang
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