07 November 2013 17:27 [Source: ICIS news]
HOUSTON (ICIS)--Third-quarter merger and acquisition (M&A) activity for the global chemical industry rose in both the number and average size of the deals versus the second quarter, PricewaterhouseCoopers (PwC) said on Thursday.
The average value of a deal rose by 10% quarter on quarter, boosted by an increase in the number of mergers and acquisitions worth at least $1bn (€740m), according to a report by the auditing firm. The report recorded announced deals.
This included Huntsman's announcement to buy Rockwood Holdings' pigment and performance additives business for $1.1bn, PwC said in the report. The deal should close in the first half of 2014, pending regulatory approval.
The US led in both deal value and volume in the third quarter, PwC said.
US-based buyers announced seven deals valued at $2.2bn, PwC said. That represented 45% of the total value of M&A activity during the quarter. By contrast, buyers based in the eurozone were responsible for only four deals valued at $840.8m and drove only 17% of Q3 deal value.
During the third quarter, the total number of deals reached 231. This included 90 specialty chemical deals, 54 commodity chemical and two industrial gas.
From the first through the third quarter of this year, there were 720 total deals, including 283 specialty chemical, 171 commodity chemical and 13 industrial gas.
For all of 2012, there were 1,178 deals, including 437 specialty, 270 commodity and 24 industrial gas.
PwC did not provide figures for Q3 2012.
By dollar value, deals reached $5.58bn in Q3 2013. From Q1-Q3, deals reached $16.3bn. For all of 2012, they reached $69.4bn.
The average size of a deal reached $24m in Q3 2013, versus $23m in the first through third quarters and $59m for all of 2012.
Looking ahead to the fourth quarter, problems in the eurozone could blunt global M&A gains, PwC said. In the US, the partial government shutdown that took place in the first half of October could cause the economy to slow down. This would cause revenues to decline, which would make less money available for acquisitions.
For all of 2013, the number and value of deals could rank among the lowest in the last 10 years if current trends continue, PwC said.
The outlook could become positive in 2014 if the eurozone economy begins to recover and if the US can resolve its debt and government funding issues, PwC said.
($1 = €0.74)
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