2014 Global Chemical Industry Mergers & Acquisitions Outlook

The Deloitte Touche Tohmatsu Limited Global Manufacturing Industry group has released this year’s 2014 Global chemical industry mergers and acquisitions outlook which predicts a rise in global chemical activity in 2014 due to downstream value-added opportunities, continued strength in specialty chemicals, and portfolio realignments in North America. The outlook also projects M&A growth in 2014 as companies focus on key ends markets including agrochemicals, bio-based/green chemicals, and health and nutrition. Highlights of regional M&A activity include:

• Chemical companies in the United States are likely to focus their M&A efforts less on cyclical commodity platforms and more on higher growth investments that offer greater product differentiation in the global chemicals market. The Deloitte report also anticipates a continuation of large deals in the first half of 2014.
• The outlook for European chemical M&A activity is unchanged as the region’s economy is stabilizing, yet still fragile. Additionally, the increased competition from Asia as well as the low-cost production environment in the United States will continue to impact the growth prospects for many European chemical companies. Private equity will also play a role in M&A activity in the region in 2014, as well as small divestitures and bolt-on acquisitions.
• Asia Pacific’s transaction activity continues to be driven by China. In 2014, M&A investments will play a prominent role in driving growth. According to the report, global chemical companies are anticipating to capitalize on new market opportunities in China for high-value applications, product lines, and technologies.
• Latin America’s chemical market in 2014 will likely see further consolidation in the specialty chemical segment. The report anticipates companies to have greater focus on capturing synergies, gaining operational efficiency, and becoming more competitive in 2014.
• The report predicts a mixed outlook for the chemical industry in the Middle East, but projects moderate growth overall in M&A activity.