Merger and acquisition (M&A) activity in the global chemicals industry jumped significantly in the first quarter of 2011, when compared to the same period of 2010, according to the first quarter 2011 edition of Chemical Compounds, a quarterly analysis of M&A activity in the global chemicals industry by PwC US. For deals over $50 million, PwC says there were 31 deals worth $41 billion in the first quarter of 2011, compared to 21 transactions totaling $23 billion in the first quarter of 2010, a 48 percent increase in volume and 78 percent increase in value. In total, the first quarter saw 293 announced deals compared to 274 deals in the same period of 2010, approximately a 7 percent increase in volume.
The first quarter of 2011 saw eight deals valued at more than $1 billion, already matching more than half the number of total large deals in all of 2010 and leading by one more large deal compared to all of 2009 large deals, according to PwC.
PwC says the first three months of 2011 recorded a higher level of financial investor deal activity when compared to the same period of 2010. Financial investors accounted for $9.2 billion, or 23 percent of total deal value in the first quarter of 2011, compared to just 11 percent in the first quarter of 2010. PwC also noted that since certain acquirers may be part of an existing financial investor portfolio, deal activity by financial sponsors is typically understated.
Geographically, North America led first quarter deal activity by value with 12 transactions worth $50 million or more, comprised of six in-market deals, three inbound deals, and three outbound deals totaling $21.1 billion. The Asia-Pacific region led in volume, with 17 deals worth $10.6 billion.
China continued to show strong activity with approximately $6 billion in deals of all sizes, including $3.8 billion worth of outbound deals and $1.9 billion in local deals, according to PwC. The level of first quarter deal activity in China was up moderately in volume as compared with 2010 on an annualized basis, and up considerably in value for outbound deals, a trend PwC expects to see increasing in 2011.
For a copy of Chemical Compounds, PwC”s quarterly analysis of M&A activity in the global chemicals sector, visit www.pwc.com/us/industrialproducts.