2016GlobalchemicalindustrymergersandacquisitionsoutlookAquestforfocusJanuary201622016Globalchemicalindustrymergersandacquisitionsoutlook—Aquestforfocus3Contents4Globalactivity8Mergersandacquisitionsactivitybychemicalsegment11Chemicalmergersandacquisitionsactivityinkeygeographies16Summaryoutlookfor2016mergersandacquisitionsactivity17Contacts18Acknowledgements19Endnotes4GlobalactivityIntheDeloitteToucheTohmatsuLimited(DeloitteGlobal)2015Globalchemicalindustrymergersandacquisitionsoutlook,recordlevelsofchemicalmergersandacquisitions(M&A)activityin2014wereobserved,withapredictionthatstrongM&Amomentumwouldcontinueintheindustryinto2015.1Whilethenumberofglobalchemicaldealswasrelativelyflatin2015,thestrongM&Amomentumhascontinuedwiththenumberofglobalchemicaldealsin2015exceedingtheprevioussix-yearaveragebyover6percent(seeFigure1).Also,thetotalglobaldealvalueissettingnewrecordsdrivenbythe16dealsvaluedatoverUS$1billionannouncedduringtheyear,includingtheproposedUS$73billionDowandDuPontdeal.2In2015,theyearbeganwithplentyofuncertaintyrelatedtokeyfeedstockvolatility,asoilpricesexperienceda50percentdecreaseinthesecondhalfof2014.3Oilpricescontinuedtheirdecreasein2015asthespotpriceforbothWestTexasIntermediate(WTI)andBrentcrudeoilfinishedtheyearatbelowUS$40perbarrel.4Thecontinuedslideinoilprices,aswellasupstreampetrochemicalprices,whichareoftendirectlycorrelatedwithoilprices,putpressureondealvaluationexpectationsbetweenbuyersandsellers.Manyglobalchemicalcompaniesfacedadifficultoperatingenvironmentin2015,challengingchemicalexecutivestofindgrowthinoftencontractingorslowgrowingend-marketsandgeographies.Globalcommoditypricedecreasesacrossagriculture,metals,andenergyputdemandpressuresonchemicalcompaniesservingtheseend-marketsandmadeforamorechallengingenvironmentforbio-basedchemicalscompetingwithpetro-basedsubstitutes.Growthinindustrialproduction,amajordriverofchemicaldemand,hasalsobeenunderpressureinmanyeconomies.Economicgrowthratesslowedduring2015inmanyimportanteconomiesand2016forecast...
