Global Chemicals M&A closed 2016 on an upward swing. Total deal value of $46.9 billion (for deals with disclosed value greater than $50 million) was 128% higher than the last quarter. Deal volume was also stronger as Q4 brought 38 new chemical deals, a 52% increase from the last quarter. On average, the sector has seen 140 deals in each of the last two years.
Two thousand and sixteen experienced several industry-altering transactions as (i) in February, ChemChina announced its acquisition of Syngenta, (ii) in May, Bayer announced its acquisition of Monsanto, and (iii) in December, the Praxair/Linde merger announcement was confirmed after a previous failed attempt. These three megadeals alone account for 68% of the total deal value announced in 2016.
While the volume of transactions remained highest in the Asia & Oceania region, this year saw a significant move towards cross-border transactions. Seventy-eight percent of deal value in 2016 is attributed to transactions made outside country boundaries, compared to only 24% in 2015.
The recent stability of feedstock prices may have led to a decline of a number of new transactions in the Fertilizers and Agricultural Chemicals space in Q4, a category that has been very active and has experienced the highest premiums in Chemicals M&A over the last few years.
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