AI Magazine Issue 11 2018

46 Acquisition International - Issue 11 2018 There has been a decline in the volume and value of deals targeting chemicals companies in October, according to Zephyr, the M&A database published by Bureau van Dijk. So far, there have been 89 such transactions worth a combined USD 7,201 million signed off during the month under review. t is worth noting that at the time of writing, there are still six days to go until the end of October and there is always a chance of some high profile dealmaking affecting both volume and value by the time the month comes to a close. As things stand, the 89 deals announced in October represents a 18 per cent decline on the 108 deals signed off in September, while value slipped 12 per cent from USD 8,173 million over the same timeframe. October’s value represents the lowest for any month of 2018 so far; the last time value was lower was in December 2017, when deals worth USD 6,882 million were announced, while volume has not plumbed such depths since February 2010 (85). In terms of 2018 to date, chemicals companies have been targeted in 1,357 deals worth USD 125,410 million since the start of January, compared to the USD 154,175 million injected across 1,862 transactions in 2017. Despite the decline in value recorded in October, there have still been a number of sizeable deals announced as two transactions broke the USD 1,000 million. The largest of all was worth USD 1,965 million and involved Lotte investing in South Korea-based petrochemicals manufacturer Lotte Chemical in exchange for a 23 per cent shareholding. This was followed by a USD 1,326 million deal which saw Johnson & Johnson up its stake in Japanese cosmetics maker CI:Z Holding from 48 per cent to 100 per cent. In all, 11 deals broke the USD 100 million-barrier in the month under review and also featured targets based in Belgium and China. Of the USD 7,201 million-worth of dealmaking recorded for the sector in 2018, the two largest deals combined accounted for 46 per cent of the total value. This highlights the fact that a few deals can have a big impact on overall results and means the course of a month could change overnight, if a high-value deal is announced. Given the prevalence of Korean, Chinese and Japanese deals in the month’s top transactions, it is no surprise to see the Far East and Central Asia top the sector rankings by both volume and value in October. In all, companies based in the region were targeted in 37 deals worth a combined USD 5,961 million. In terms of value, this places it significantly higher than its nearest competitor – Western Europe, which was targeted in deals worth USD 963 million. South and Central America placed third with USD 248 million. Western Europe and South and Central America also placed second and third by volume, with 33 and eight deals, respectively. In conclusion, October has failed to generate the same levels of dealmaking as the preceding months, but the six days remaining until the end of the month give hope that both volume and value could yet see a boost before the start of November. Likewise, although 2018 as a whole is not on the same level as other recent years as yet, there is every chance that November and December could be busy months and push volume and value to the levels seen in 2015, 2016 and 2017. Company: Bureau van Dijk E-Mail: Web: Chemicals I