COVID-19 puts damper on chemical deals

One business consequence of the COVID-19 outbreak is the delay of chemical company mergers and acquisitions. Nippon Shokubai is delaying its merger with Sanyo Chemical. The Japanese companies originally planned to complete their union, which would create a firm with about $4.7 billion per year in sales, in October. Now, they don’t expect to consummatethe transaction until April 2021. The companies say the “recent global outbreak of COVID-19 and the sharp decline in the oil and oil product markets” has caused too much uncertainty to complete the transaction right away. The pandemic has also delayed by a month SK Global Chemical’s purchase of Arkema’s functional polyolefins business for about $370 million. The companies now expect to close the deal May 11. Meanwhile, the composites maker Hexcel completely canceled its merger with the aerospace components firm Woodward, citing the health crisis caused by the novel coronavirus.