25 May 2011 15:26 [Source: ICIS news]
LONDON (ICIS)--US and European chemicals producers will continue to pursue mergers and acquisitions (M&A) this year and in 2012, while strong demand from Asia and Latin America will bolster their growth over the next 12–18 months, Moody’s Investors Service said on Wednesday.
A report from the credit ratings agency said US and European chemicals companies will be able to carry out medium-sized acquisitions and increase investments without such actions “materially affecting their credit quality”.
The report also stated that the ?xml:namespace>
“Strong demand from Asia – especially
“North American producers of petrochemicals will maintain their natural-gas cost advantage, while European producers face greater risks from slower growth at home and increased competition,” Nadtotchi added.
Companies with significant sales in emerging markets – such as BASF, Dow Chemical, AkzoNobel, Celanese and Syngenta – “will reap the greatest benefits – as long as the growth of Chinese demand remains strong,” Nadtotchi noted.
Moody’s also said that companies such as LyondellBasell, Chevron Phillips, INEOS, Westlake, NOVA and Georgia Gulf “will benefit from the sustainable feedstock cost advantage in the US and a strong pricing momentum for olefins and aromatics, along with such diversified majors as Dow Chemical”.
The agency warned that a sharp rise in oil prices would risk triggering inflation in emerging markets, which would damage
Any increase in dividends or share buybacks would hamper the chemicals sector’s positive credit, Moody's added.
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