Chemical energy sector M&A deals worth USD 41bn in Q1 2011

The chemical energy sector witnessed mergers and acquisitions worth USD 41 billion in the January-March quarter of 2011, with the Asia-Pacific region accounting for USD 11 billion of the total value, says global consultancy firm PwC.

It said the chemical industry across the globe will continue to see a high level of deal activity in the remaining months of 2011 as well.

According to a report by PwC, there were a total of 31 transactions worth over USD 50 million during the quarter, adding up to a cumulative of USD 41 billion in the first quarter of 2011, compared to 21 deals totaling USD 23 billion in the year-ago period.

This represents a 48% increase in the volume and 78% jump in the value of M&A deals in the chemical energy sector. "The higher level of deal activity can be attributed to stronger balance sheets, healthier margins and positive forecasts from a range of businesses across the globe," PwC Global Chemicals Leader Tracey Stover said.

Stover further said, "As the global economy and fundamental demand for chemicals continues, we expect a high level of deal activity will continue, making 2011 a very strong year for M&A in the global chemicals industry."
Geographically, North America led first quarter deal activity in terms of value with 12 transactions worth USD 50 million or more, totalling USD 21.1 billion.  The Asia-Pacific region led in terms of volume, with 17 deals worth USD 10.6 billion.

The report did not provide any specific data on India.

China showed strong activity, with about USD 6 billion in deals of all sizes, including USD 3.8 billion worth of outbound deals and USD 1.9 billion in local deals.

"China, as well as emerging market deal-makers, are expected to play an even greater role in activity this year, which could significantly increase the level of competitive bidding," Stover added.