Chemical compounds

Chemical compounds: Global chemical mergers and acquisitions analysis - 3Q 2008

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Global chemical mergers and acquisitions analysis -
3Q 2008

The year 2008 began as expected with Q1 deal volume dropping to an annualized level of approximately 600 deals with a corresponding annualized value of $44 billion and only four large deals (deals with transaction values greater than $1 billion) with a total value of $8 billion. Q2 activity had an increased volume of smaller deals, which increased the annualized volume to approximately 750 deals with a corresponding annualized value of $32 billion and no large deals. Q3 deviated from the first half of the year to a higher level of deal volume with six large deals valued at $28 billion. Annualized deal volume based on the first three quarters is now at 829 deals with a corresponding annualized value of $64 billion.

Deal activity remains robust despite a challenging economic climate and will fall within the ranges seen since 1998 and above the 2002 low point (see the 10-year M&A History chart on page 3). Deal activity in 2008 reveals that some chemical companies are continuing to aggressively pursue transformational deals to drive long-term strategic growth objectives, as well as mid-sized tactical deals to help them achieve their short-term business needs.

Companies able to execute transformational and bolt-on transactions during uncertain economic periods should be well-positioned to capture growth when the global economy regains solid footing. We will continue to watch these companies and to share our views on how they reshape the global chemical industry.