PwC recently unveiled its quarterly analysis of the merger and acquisition activity in the global chemicals industry, which continued to predict strong growth in 2014. Although deal volume has decreased somewhat, deal value in the third quarter was at its highest since early 2011, hitting an average of $756 million. This heightened value was largely aided by the nine mega-deals that took place this quarter, including the largest, the $6.3 billion acquisition of Rockwood Holdings by Albemarle Corporation.
PwC tracks several trends impacting deal value numbers, especially in relation to the types and locations of acquirers and targets active in each quarter.
For this quarter, the proportion of acquisitions by investors declined over last quarter, but held steadily above the average for last year. The number of acquirers in advanced economies also dropped, but the United States remained the dominant player in the activity. While Chinese companies led the quarter in deal volume, U.S. targets and acquirers made up almost half of the deal value with one third of the total deal volume. U.S. companies also accounted for three of the nine mega-deals in the third quarter.
Continued growth in U.S. GDP combined with growth in foreign economies should sustain momentum as the year finishes out. Because of the growth in transaction value, activity in this sector is predicted to hit its highest annual value since 2010.