Top 10 Mergers and Acquisitions – Chemicals and Pharmaceuticals Industry Gets the Knives Out

The Mergers and Acquisitions Race is On Top 10 Mergers and Acquisitions – Chemicals and Pharmaceuticals Industry Gets the Knives Out

01.07.2016Author Dipl.-Medienwirt (FH) Matthias Back

2015 was the year of mergers and acquisitions (M&A). Mergers and acquisitions increased by 43 % worldwide to a new record value of 4.5 billion dollars as compared to the previous year. PROCESS presents the biggest deals of the previous 18 months in detail.

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Round and round and round it goes: Mergers and acquisitions are the top attractions for 2016. Especially chemical and pharmaceutical companies keep the m&a merry-go-round running: Five of ten major acquisitions in 2016 stem from these branches.
(Picture: © Harald Biebel - Fotolia)

Even if the three biggest mergers and acquisitions are not from the chemicals and pharmaceuticals industry, it is primarily this economic sector which is witnessing a lot of movement at present. Weakening competition, limited organic growth as well as continuously shrinking profit margins are forcing companies to think out of the box. Even if the three biggest mergers and acquisitions are not from the chemicals and pharmaceuticals industry, it is primarily this economic sector which is witnessing a lot of movement at present. Weakening competition, limited organic growth as well as continuously shrinking profit margins are forcing companies to think out of the box.

(The following picture gallery delivers background information about the individual deals.))

Gallery

No. 1: Anheuser-Bush Inbev acquires Sab Miller (status: The companies are agreeable, decision of the EU competition authorities is still awaited): The to-date biggest merger in the history of the sector will cost the Belgian company Anheuser-Bush (among other things Budweiser and Beck's) approximately 107 billion dollars. The acquisition will catapult the brewery giant to totally new dimensions, as in future every third beer the world over will come from the cauldrons of the merging companies.

Unlike in many other deals, the acquisition of the world’s second biggest US brewery Sab Miller (Pilsner Urquell and Foster's) by the leader of the sector Anheuser-Bush did not face any major complications. To get the approval of the US competition authorities, the two companies consented to the sale of Sab Miller shares to the US Group Miller Coors. The premium for Miller Coors was received by brewer Molson Coors. The approval of the EU competition authorities is still pending. To make it easier for the competition watchdog to take a decision, Anheuser-Bush want to severe their ties with other brands like Grolsch (Netherlands), Peroni (Italy) or even Pilsner Urquell (Czech Republic).

In addition to other minor sales activities in the US, Anheuser-Bush will also give up the China activities of Sab Miller. China Resources Beer Holdings owns 49 percent shares in Sab Miller amounting to 1.6 billion dollars. The Belgian company now expects to get approval for the mega deal from the Chinese authorities too.

Gallery with 37 images

The biggest acquisition of the previous 18 months boasting a total volume of 107 billion dollars was accomplished in the beverages industry. The Belgian brewery Anheuser Bush Inbev acquired the US brewery Group Sab Miller.

With the acquisition of British gas specialists BG Group by the British-Netherlands oil group Royal Dutch Shell for 79.3 billion dollars, a deal from the oil/gas area made it to the Top 3. The Timer Warner Cable acquisition by Charter Communications which is only 50 million dollars less is another proof of the increasing consolidation in the US cable market.

The biggest M&A deal in the chemicals and pharmaceuticals sector in the last one-and-a-half years is The merger of Dow Chemical and Dupont. The jumbo merger between the two US companies is expected to cost 68.6 billion dollars and would threaten the current leadership status of BASF in the chemicals industry at least for the time being. According to media reports however, plans are already in place to divide the newly created mega group into three independent companies in the areas of agrochemicals and seeds, substances as well as special chemicals.

The US computer manufacturer Dell came fifth with the acquisition of storage specialists EMC for 67 billion dollars and is therefore the first merger deal between two technology companies in the Top 10.

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