Chemical compounds

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Chemical compounds is a quarterly analysis of global merger and acquisition activity in the chemicals industry. Each edition includes a review of overall deal activity for the quarter and year-to-date and a summary of large deals. Also included is a spotlight on a PwC service and a case study.

Global chemicals M&A analysis: Q3 2009

This quarter, the Chemical compounds report takes a deeper look at the impact prospective energy and climate policies may have on business transactions. Our special report highlights the role of cap-and-trade on climate change legislation, the deal market's response, company brand and reputation considerations, and the interests of the growing number of environmentally aware stakeholders.

The third quarter 2009 mergers and acquisitions analysis continued to show the impact the economic downturn is having on the chemicals industry. The short-term effect has been relatively consistent across many of the industry's sectors with regard to, among other things, fundamental demand, destocking of the supply chain, and raw material price volatility.

The downturn also continued to impact the chemical deal activity volume in the third quarter. This past quarter was less active than the first two quarters of the year, and full year 2009 activity is tracking to lag 2008 by more than 20 percent. However, beyond the fourth quarter of 2009, we believe M&A activity will increase as some of the underlying economic conditions improve, which will give buyers and sellers the confidence they need to reenter the market.