Global chemical industry M & A transactions are increasingly active

Influenced by the low financing cost, a large number of divestitures and healthy valuation, the global chemical M & a market is getting better In particular, chemical enterprises are actively promoting business transformation, divestiture of non core assets and focusing on key growth areas These efforts will give additional impetus to the global chemical M & a market in 2014 Zui, investment bankers and chemical industry executives, said recently that the global chemical M & a market was becoming more active in 2013, and the strong growth of M & A activity in the second half of the year made up for the weakness in the first half "In the second quarter of 2013 and the first quarter of this year, the global M & A activity in the chemical industry is very strong," said Mario Toukan, chief of chemical business at keybanc capital markets M & A activity is expected to remain strong in 2014 " Chemical M & A tends to be active Young & Partners (Y & P), the US investment bank, said that good market demand and favorable market environment helped the global chemical M & A activity tend to be strong in 2013 and is expected to continue to increase in 2014 "The global chemical M & a market rebounded strongly in 2013," said Peter young, chairman of Y & P According to Y & P data, in 2013, the total volume of global large-scale chemical M & A transactions (each of which is worth more than US $25 million) reached US $31 billion, up 41% year-on-year; the number of completed transactions was 83, up 30% year-on-year Although the activity of the global chemical M & a market rebounded significantly in 2013, it was still significantly lower than the peak level of US $82 billion in 2011 Young pointed out that as long as the economies of Europe, China and the United States do not experience major turbulence, the prospect of global chemical M & a market in 2014 is very optimistic The downturn in small emerging markets is not enough to have a broad impact unless it spreads to larger economies Young said that the valuation of bulk chemicals and specialty chemicals assets increased in 2013, and the performance of chemical stocks was relatively strong In 2013, the Y & P basic chemical industry stock index rose by 34%, the specialized chemical industry stock index rose by 27%, and the diversified chemical industry stock index rose by 38% Young said: "the strong performance of the stock market has promoted the valuation of chemical companies to rise, while having a positive impact on the M & a market and the IPO market." Executives in the chemical industry agree Paul, chairman and chief financial officer of the company "The chemical M & a market outlook remains relatively stable," Mr Graff said There are two main factors that provide power to support the current strong momentum of chemical M & a market First, the cost of financing is at a historically low level Some bankers say the cost of financing this year will be slightly higher than last year, but historically lower, while others say the cost of financing this year will even be slightly lower than last year Paul, head of chemical M & a business of Citigroup "I don't see anything that would cause serious damage to the financing market," Smith said Geopolitical risk is hard to predict, but Zui's big risk may be downside risk, because fundamentals are very strong and financing interest rate is still very low " Another factor that stimulates the activity of M & A is the trend of divestiture of chemical enterprises "In the second half of 2013, we saw many chemical companies spin off their non core assets for sale," said ly zachariades, a partner at investment bank wellens group Many chemical companies, including Dow, DuPont, Ashland, Longsheng, kejua and Rockwood holdings, have announced business restructuring plans Most of these divestitures are affected by the focus on core business strategy of chemical enterprises Including Ashland's divestiture of water treatment business, Dow's planned divestiture of $4.5 billion to $6 billion, Rockwood's divestiture of titanium Bai powder business, and DuPont's and FMC's large-scale divestiture plans These divestitures are usually driven by investors For example, FMC divestitures its mineral business to meet the requirements of investors, because investors want chemical enterprises to focus on the development of core business and have a clear development direction David, head of global chemicals, Jeffrey investment bank "It's clear that active investors are pushing some chemical companies to rationalize their business," Bradley said