06 September 2013 11:49 [Source: ICB]
After a lacklustre 2012 and early 2013, chemicals mergers and acquisitions (M&A) activity has started to pick up, says investment bank The Valence Group.
In a video interview, partner Anton Ticktin says the most significant long-term trend has been Middle East and Asian companies moving downstream into intermediates and specialties while steering away from the upstream commodity area. This has meant that European and US companies have had to realign their portfolios. "European companies had a very impressive technological advantage in the intermediates space. Now we're seeing some of that is being taken by Middle East and Asian competitors."
US shale gas is also affecting M&A because a lot of global players want to access the cheap feedstocks it offers, says Ticktin: "M&A activity will be strong because people want to have a piece of that shale gas advantage. Q2, Q3 and Q4 look very strong and this will continue into the first half of 2014 for sure. A lot of companies have put businesses up for sale or undertaken strategic reviews such as DuPont, Dow, Ashland and others.
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