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Pace Of Mergers Slows In The Third Quarter

by Melody M. Bomgardner
November 7, 2011 | A version of this story appeared in Volume 89, Issue 45

The number and value of chemical acquisitions worth more than $50 million have declined significantly from early in 2011. There were 22 such deals made in the third quarter, down from 31 in the second quarter and 33 in the first quarter of this year, according to a report by consulting firm PricewaterhouseCoopers (PwC). In the third quarter, combined deal value was up slightly to $16.0 billion from $14.8 billion in the second quarter, but it was still considerably lower than the $42.0 billion recorded in the first quarter. Despite the dip, PwC points out, four deals bigger than $1.0 billion were announced during the third quarter; the largest was Ecolab’s $8.1 billion purchase of water treatment firm Nalco. The main force steering executives away from acquisitions is economic uncertainty, says Tracey Stover, global chemicals leader for PwC. “There are discussions happening and some activity, but it’s not resolving into public announcements due to economic weakness or potential weakness,” she says. Compared with the first quarter of the year, when economic recovery caused the merger floodgates to open, Stover says, executives are proceeding more slowly now and with more caution.


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