Mergers and acquisitions (M&A) activity in the global chemicals business ramped up substantially in 2014, recording the highest volume in a decade and reaching the highest deal value since 2007, according to a quarterly analysis of the global deal activity in the chemicals industry by PwC US.
During the year, 177 deals worth more than $50 million each took place, representing a combined value of $85 billion.
Megadeals, or transactions worth more than $1 billion, drove chemicals M&A activity, with 25 deals totaling $50 billion, substantially higher than the 10 deals and total value of $19 billion in 2013.
In the fourth quarter, 51 deals worth more than $50 million took place at a total value of $19 billion. Four megadeals took place with a total value of $9 billion.
“Improved economic conditions in 2014 made it more enticing for M&A activity to occur in the chemicals sector,” said Pam Schlosser, US chemicals leader for PwC. “Specialty chemicals also played a part in driving M&A activity as almost half of the megadeals that took place in 2014 were in the specialty chemicals segment.”
Asia and Oceania comprised the region most active in deal-making, seeing 111 deals worth more than $50 million, valued at just more than $35 billion, driven by strong activity in China.
“We’re continuing to see local deals taking place in China as the government consolidates heavy industry together in an effort to drive increased efficiency and boost exports,” Schlosser added.
North America led deal value with 60 deals worth more than $50 million totaling $41 billion, driven by 11 megadeals valued at $26 billion.
Those totals reflect the 10-year highs reached in M&A deal value and volume of all upstream, midstream, and downstream transactions in the US. A total of 252 oil and gas deals took place, reaching combined value of $321.5 billion (OGJ Online, Jan. 29, 2015).