Big Chemical Mergers On Track To Rise

Deal-making activity in the first quarter of 2011 suggests that chemical companies will move quickly to close deals this year and that many acquisitions will have price tags of more than $1 billion. PricewaterhouseCoo pers, an accounting and advisory services firm, reports that the number of announced chemical deals dropped 16% compared with the first quarter of last year but that the number of deals worth more than $1 billion shot up to 35 from 19. Private equity buyers increased their share of deals to 23%, the highest in five years. Two of the largest announced deals in the quarter were Berkshire Hathaway’s bid for Lubrizol of about $9.7 billion and DuPont’s acquisition of Danisco for $6.6 billion. PwC forecasts that deals will close faster this year than during the downturn. The firm reports more competition among buyers due to a return to solid balance sheets, increased confidence in demand, and improved lending conditions. In addition, potential buyers are vying with bidders from companies in developing countries such as China.