2016年全球化工并购展望报告.pdf

2016 Global chemical industry mergers and acquisitions outlookA quest for focus January 20162 2016 Global chemical industry mergers and acquisitions outlookA quest for focus 3Contents4 Global activity 8 Mergers and acquisitions activity by chemical segment 11 Chemical mergers and acquisitions activity in key geographies 16 Summary outlook for 2016 mergers and acquisitions activity 17 Contacts 18 Acknowledgements 19 Endnotes4Global activity In the Deloitte Touche Tohmatsu Limited(Deloitte Global)2015 Global chemical industry mergers and acquisitions outlook,record levels of chemical mergers and acquisitions(M&A)activity in 2014 were observed,with a prediction that strong M&A momentum would continue in the industry into 2015.1 While the number of global chemical deals was relatively flat in 2015,the strong M&A momentum has continued with the number of global chemical deals in 2015 exceeding the previous six-year average by over 6 percent(see Figure 1).Also,the total global deal value is setting new records driven by the 16 deals valued at over US$1 billion announced during the year,including the proposed US$73 billion Dow and DuPont deal.2 In 2015,the year began with plenty of uncertainty related to key feedstock volatility,as oil prices experienced a 50 percent decrease in the second half of 2014.3 Oil prices continued their decrease in 2015 as the spot price for both West Texas Intermediate(WTI)and Brent crude oil finished the year at below US$40 per barrel.4 The continued slide in oil prices,as well as upstream petrochemical prices,which are often directly correlated with oil prices,put pressure on deal valuation expectations between buyers and sellers.Many global chemical companies faced a difficult operating environment in 2015,challenging chemical executives to find growth in often contracting or slow growing end-markets and geographies.Global commodity price decreases across agriculture,metals,and energy put demand pressures on chemical companies serving these end-markets and made for a more challenging environment for bio-based chemicals competing with petro-based substitutes.Growth in industrial production,a major driver of chemical demand,has also been under pressure in many economies.Economic growth rates slowed during 2015 in many important economies and 2016 forecasts have seen recent downward revisions by both the International Monetary Fund and World Bank.5These various market and demand factors have put pressure on global chemical revenues,as well as their stock performance.Based on a Deloitte Global analysis,the components of the Dow Jones Chemical Titans 30 Index experienced average revenue increase of only 0.3 percent in the latest twelve months of 2015,compared to 3.3 percent in 2014.These challenges have contributed to many global chemical companies efforts to focus on their core strengths in order to drive revenue growth and shareholder value.While chemical companies have been realigning their portfolios over the past years to reduce complexity in their businesses and make them easier for investors to understand,there was an increasing emphasis observed on building their core businesses that underpinned 2015 M&A activity.Helped by fairly liquid and inexpensive debt markets,many global chemical companies with strong balance sheets and continued strong cash flows looked to acquisitions in 2015 to deliver growth.Growth driven by a quest for focus.What will 2016 bring?Will the potential Dow and DuPont merger drive consolidation in the agricultural chemicals segment?Will other segments take notice and pursue simplification and focus on their core markets?How will new advances in additive manufacturing technology open opportunities for collaboration and acquisitions?Will M&A markets now accept low oil prices as the“new normal”and incent or at least not distract from driving M&A activity?Which geographies will lead in 2016 and which will retreat?These questions and others will be explored in this years issue of the 2016 Global chemical industry mergers and acquisitions outlook.2016 Global chemical industry mergers and acquisitions outlookA quest for focus 5Figure 1:Global chemical industry mergers and acquisitions activity(2009 to 2015)-20.0 40.0 60.0 80.0 100.0 120.0 140.0 160.0 -100 200 300 400 500 600 700 2009201020112012201320142015Volume(number of transactions)Value(US$billions)Volume(number of transactions)Value(US$billions)YearTotal activity(2009 to 2015)2009201020112012201320142015Volume(numberoftransactions)450 579 646 609 537 635 612Value(US$billions)15.6 55.6 55.1 41.8 31.8 77.8 145.8Activity over US$1 billion(2009 to 2015)2009201020112012201320142015Volume(numberoftransactions)310 11118 13 16Value(US$billions)8.9 39.2 36.7 23.8 13.6 52.6 126.3Source:Deloitte Touche Tohmatsu Limited Global Consumer&Industrial Products Industry group analysis of data from S&P Capital IQ,January 2016.Data is from January 1,2009 to December 31,2015.Chemical companies expected to aggressively pursue growth by focusing on the core Growth in mega deals(over US$1 billion)returned starting in the fourth quarter of 2013 and has continued through 2015.6 In contrast to 2014,which also experienced a divergent trend of further fragmentation of the industry,2015 may well be remembered as the year of deals that reshaped the industry.This was the result of companies that pursued scale and focus in their core businesses and competences to enhance their competitive position and provide more innovative solutions to their customers needs.The agricultural chemicals segment is a prime example of the type of transformational deals being contemplated in 2015.In May 2015,Monsanto attempted to negotiate a merger with Syngenta that was believed to provide the combined company with“scale and reach”to offer integrated solutions across a larger geography and crop selection.7 The recently announced Dow and DuPont combination and anticipated spin-offs are expected to create three companies including a new US$19 billion global agriculture chemicals company,a US$51 billion material sciences company and a US$13 billion specialty products company,which will likely provide each with more focus on their core businesses and the needs of their customers.8 Agricultural chemicals was not the only segment that demonstrated a pursuit of focus on its core business.In November 2015,Air Liquide announced its US$13.4 billion acquisition of Airgas that will bring together two highly complementary businesses to deliver greater value,service,and innovation to customers in North America and around the world.9 In the United States(US),Airgas leadership in the packaged gases business and associated products and services and Air Liquides strong footprint in complementary activities will likely increase the scope and competitiveness of the combined companies productoffering.106Corporate spin-offs:Is it all about the tax benefits?Activist shareholders and proactive management teams have been a key impetus for reshaping the global chemical industry.This is adding focus on core competencies and end markets,with the thesis of creating more value for shareholders,and simplifying overly complex business models.Once the strategy to separate has been made,many important decisions remain including how to effectuate the separation.Will it be through a sale or divestiture to another party,such as a strategic buyer or private equity firm,or through a spin-off to existing shareholders?Figure 2:Global chemical industry spin-offs(2009 to 2015)-1 2 3 4 5 6 7 8 9 2009201020112012201320142015Volume(number of spin-offs)Year Total spin-off activity(2009 to 2015)2009201020112012201320142015Number of spins3641258Source:Deloitte Touche Tohmatsu Limited Global Consumer&Industrial Products Industry group analysis of data from Thompson Reuters,accessed in January 2016.Data is from January 1,2009 to December31,2015.Spinoffs are becoming more prevalent as a means to realign portfolios in the global chemical industry,as corporate strategy continues to drive divestitures of non-core or underperforming assets.One might draw the conclusion that spin-offs are not very meaningful in the global chemical industry,based purely on a comparison of the number of spin-offs versus total M&A activity(see Figure 2).However,in 2014 and 2015 spun entities had a combined total revenue of approximately US$25 billion.11 Recent notable chemical spin-offs announced include Ashlands spin-off of Valvoline,12 The Bayer Companys partial initial public offering(IPO)of its material science business(Covestro),13 and Air Products spin-off of its Material Technology business(Versum Materials).14 Are the tax savings the primary reason for choosing a spin-off over a divestiture?While tax implications are an important part of the equation in delivering value to shareholders,there are other factors to evaluate.2016 Global chemical industry mergers and acquisitions outlookA quest for focus 7The sale and divestiture process generally proceeds faster and requires less external financial reporting,but negotiating with a buyer and gaining regulatory approvals can add a degree of complexity and uncertainty.Spin-offs,on the other hand,can often take a year or more to plan and execute and typically require rigorously prepared audited financial statements and public company regulatory filings.In addition to often greater after-tax benefits to the existing shareholders,spin-offs can often provide higher market valuations for both the parent company and the spin company,and may not hinge on a buyers or an industry regulators approval to close.15 However,spin-offs lack the revenue and cost synergies often realized in acquisitions and can sometimes result in dis-synergies.This is likely due to the additional public company and standalone costs necessary to operate the spun-off entity on a standalone basis.As the portfolio realignment trend in the global chemical industry does not seem to look to be slowing down,strong spin-off activity,similar to the levels experienced in 2014 and 2015,is expected to continue into 2016 and 2017.The pending Dow and DuPont combination is also expected to result in two sizable spin-offs over the next few years,further adding to the spin-off momentum.16 Given the often low tax basis in legacy businesses,spin-offs will likely continue to be a means,which global chemical companies use to effectuate separations.Additive manufacturing:Will new technologies drive new deals?Additive manufacturing is a term used for a set of technologies being developed over decades and now reaching a level of maturity that has potential to transform manufacturing industries over the next decade.This manufacturing process creates products through the addition of materials(typically layer by layer)rather than by subtraction(e.g.,through machining or other types of processing).17 The significant advantage of additive manufacturing is the reduction of capital investment through increased economies of scale and economies of scope,which both serve to reduce the average cost per unit.Some of the examples of the material used to form the layers described above are metallic powders,polymers,plasticizers,and resins.These exciting technologies likely have potential to be disruptive in certain manufacturing sectors and are expected to become increasingly important to the global chemical industry.A report recently issued by SmarTech Publishing predicts that consumption of polymers in additive manufacturing will reach US$4.3 billion by 2023.18 A further specialization in producing thespecialty chemicals used in additive manufacturing mayinevitably lead to greater collaboration between specialty chemical manufacturers,such as the recent alliance formed between Eastman Chemical Company and Helian Polymers.19 Additive manufacturing may be one example of an area that chemical companies are willing to move to the edge of their core competencies,potentially moving into new ecosystems in the pursuit of growth.8Mergers and acquisitions activity by chemical segmentThough M&A activity remains strong,deal volume(i.e.number of transactions)in 2015 was flat or slightly lower as compared to 2014 for all chemical segments,except the fertilizers and agricultural chemicals segment,which experienced an increase(see Figure3).The following section explores the M&A activity in each of the target chemicals segments and highlights recent transactions.Figure 3:Global chemical industry mergers and acquisitions-by target segment(2009 to 2015)-50 100 150 200 250 300 350 400 450 CommoditiesIntermediates and specialty materialsFertilizers and agricultural chemicalsIndustrial gasesDiversified2009201020112012201320142015Volume(number of transactions)Target segmentTotal activity-by target segment(2009 to 2015)Target segment2009201020112012201320142015Commodities 301 356 376 350 340 383 372 Intermediates and specialty materials 113 145 174 171 132 159 147 Fertilizers and agricultural chemicals 26 64 69 66 43 67 72 Industrial gases 4 9 12 14 16 15 14 Diversified 6 5 15 8 6 11 7 Total 450 579 646 609 537 635 612 Source:Deloitte Touche Tohmatsu Limited Global Consumer&Industrial Products Industry group analysis of data from S&P Capital IQ,January 2016.Data is from 1 January 2009 to 31 December 2015.Commodity chemicals:Scale and efficiency important in a depressed commodity chemical pricing environmentFrom a volume perspective,the deal activity in the commodities segment was relatively flat in comparison to 2014,while still higher compared to 2012 to 2013 levels.20 However,in 2015,a continuation of an important trend that started post-recession emerged-corporate realignment and portfolio rationalization.A notable 2015 transaction in this sector is Dow Chemicals separation of its US Gulf Coast chlor-alkali and vinyl,global chlorinated organics and global epoxy businesses.21 In 2016,it is expected that robust M&A activity continues in this segment.This will likely be a result of companies attempting to compensate for a lack of commercially significant innovation with portfolio rebalancing to increase focus on solutions at the end of the value stream,versus simply selling solids or liquids.22 Additionally,with depressed pricing in many commodity chemicals,such as titanium dioxide,butadiene,and xylene,some global chemical companies may try to gain scale through acquisitions and drive further efficiency by selling or even shuttering less efficient plants.2016 Global chemical industry mergers and acquisitions outlookA quest for focus 9Intermediates and specialty materials:Building thecoreGaining scale in the core was a common theme in the intermediates and specialty materials segment during 2015,as several major strategic players strengthened their portfolios through acquisitions.Although volumes have declined compared to 2014,several significant deals were announced including Solvays advanced materials portfolio upgrade via an acquisition of US-based Cytec for US$6.4 billion;23 and