The Mergers and Acquisitions Race is On Top 10 Mergers and Acquisitions – Chemicals and Pharmaceuticals Industry Gets the Knives Out
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.
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.))
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.
Towards the middle of May, the new Bayer Chief Werner Baumann dropped a bombshell. Barely 10 days after assuming office he surprised the Leverkusen-based company with 62 billion dollar acquisition offer for Monsanto in the last few weeks which offered sufficient food for thought. The deal would be the biggest acquisition of a German company and would be the perfect answer for Bayer to the continuously increasing pressure in the agrarian chemicals sector.
(The following picture gallery delivers background information about the individual deals.)
The seventh and eighth places are taken up by two deals from the food and insurance sectors. Kraft Foods and Heinz merged for 55 billion dollars. With this, Heinz becomes the 5th largest food group of the world. The US insurer Anthem acquired its competitor Cigna for 54.2 billion dollars and has thereafter become the new leader of the sector in the US.
How competitive the market for pesticides and seeds really is, is illustrated by the Syngenta acquisition attempt by Chem China. After Dupont/Dow Chemical and Bayer/Monsanto, this deal is the third mega acquisition from the agrarian sector in the Top 10. The Chinese government-owned company is willing to pay 42 billion dollars for the Swiss company.
The tenth and last place in the Top 10 of the biggest mergers and acquisitions of the last 18 months is reserved for the Israeli pharmaceuticals Group Teva Pharmaceutical with the acquisition of Generika Division of Allergan for approximately 40.5 billion dollars.
Click our picture gallery for further background information about the individual deals.
Comment of the authors: The figures in this contribution were researched on the Internet. As the final processing for a few deals is still awaited, the figures may differ depending on the source and date of the research.