Expect takeover of major Europe chem company within a year – F&S

23 May 2012 16:07  [Source: ICIS news]

LONDON (ICIS)--A top 100 chemical company in Europe is likely to be taken over within the next 12 months as consolidation in the sector continues, Frost & Sullivan predicted on Wednesday.

"Targeted consolidation in the chemicals and materials industry continues as one of the main highlights of recent years but the number of closed deals will be smaller due to widespread lack of cash availability," the research and consulting company said.

“However, in 2012 we will witness a mega acquisition of a top 100 global chemicals company headquartered in Europe,” it added, without providing further specific details.

It believes that certain speciality players in Europe have not developed the strategies needed to successfully address global “megatrends” and are vulnerable to takeover.

The prediction is made in a report on the impact of megatrends on the chemicals, materials and food industries.

The report focuses on four trends to do with the low carbon economy, health and wellness, what Frost & Sullivan calls “functionality and performance”, and globalisation.

“Green products like bioplastics, high demand for innovative chemicals and materials, and industry consolidation will dominate the chemicals and materials industry across Europe, while weight management, heart and digestive health will be the high growth sectors in food and beverage markets,” it said.

It sees food, mobility and construction as core growth markets for 2012 driven by the emerging economies.

The priority growth markets for construction and utilities players are China, Brazil and Russia, Frost & Sullivan said, while transportation players are focused on China, India and Brazil.

“In particular, the Indian demand for chemicals will grow on the back of massive growth in end-user industries such as automotive production. China's development of green technology will draw in strong chemicals investment, even for technologies such as electric vehicles,” it added.

By: Nigel Davis
+44 20 8652 3214

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