01 August 2013 18:43 [Source: ICIS news]
HOUSTON (ICIS)--Merger and acquisition (M&A) activity in the chemicals industry fell to its lowest level in five years in the second quarter of 2013, reflecting continued concerns over the global economy and “a constrained supply of assets for sale”, consultants PricewaterhouseCoopers (PwC) said in report on Thursday.
PwC said that the three months ended 30 June saw 16 chemicals transactions worth $50m (€38m) or more, totalling $2.8bn, compared with 35 transactions with a total value of $11.1bn in the second quarter of 2012.
The year-on-year decrease in both deal value and volume can be attributed to the lack of larger deals, including an absence of mega deals worth more than $1bn, PwC said.
The average deal size decreased to $175m in the second quarter of 2013, compared with $317m in the same period in 2012. ?xml:namespace>
“The global economic slowdown continues to suppress deal activity in the chemicals industry, and risk-averse acquirers have a limited supply of quality assets to choose from,” said Anthony Scamuffa,
“In fact, increased residential construction spending combined with decline in unemployment and improved consumer confidence formed a positive back-drop for the six local-market chemicals deals in the US during the second quarter,” he added.
“Growth in end-use markets is key to driving chemical demand, and while there is no strong likelihood for short-term improvement, there are expectations for renewed M&A activity over the longer-term,” Scamuffa said.
“Automotive sales are continuing to grow globally, with auto sales in the
Meanwhile, PwC is predicting continued growth in the construction sector. That growth should “provide more promising opportunities” for M&A activity in the chemical industry as well, Scamuffa said.
($1 = €0.75)
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