The
specialty chemicals segment has driven most of the activity so far this year,
increasing from $28 billion in 2006 to more than $40 billion in just the first
half of 2007. Additionally, based on recently announced deals, it is expected
that the commodity chemicals sector will show a significant increase in M&A
activity that should surpass that of 2006.
Strategic investors continue to drive deal volumes, contributing to almost
three-quarters (74%) of total chemicals M&A activity. In both 2006 and
2007, the two largest mega-deals for each year were strategic acquirers.
Financial investors contributed the remainder (26%). Although private equity
investors were not the winning bids on these deals, they were active in the
bidding process for many mega and smaller transactions. The high level of
activity is likely to continue throughout 2007.