Blog: Spending spree in the coatings industry

Last week, an announcement of an acquisition popped up almost every day. And it was not just about a larger company is buying a smaller one. We are talking about real blockbuster trades.

Two mega deals

Akzo Nobel’s acquisition of BASF’s industrial coatings business for EUR 475 million was the first blast this year. However, Sherwin-Williams’ recent move overshadows even that transaction. The U.S. coatings producer took over its rival Valspar. The purchase is valued at a price of EUR 10 billion. As soon as the acquisition is completed, Sherwin-Williams would become the largest coatings producer worldwide by surpassing Akzo Nobel and PPG.

Further mega deals in sight?

Apart from these two mega deals, last week news on acquisitions were announced almost daily: Siegwerk acquired Actega Colorchemie from the Altana Group and Synthomer bought Hexion Performance Adhesives & Coatings.

In February resins producer Allnex announced a binding offer to acquire rival Nuplex for EUR 900 million. There has been no decision yet, but it will soon be known whether Nuplex will be sold to Allnex or not. Another rumour circles around Evonik. The chemicals producer has been the target of speculations a few times lately. During the last week it was heard that Evonik might acquire Air Products’ business unit, which makes chemicals used in paint. The business unit could be valued at more than EUR 3.1 billion, according to a source.

Will 2016 become a record year for mergers and acquisitions?

A recently published study by A.T. Kearney forecasts a reshaping of the global chemicals industry due to an unimagined extent of M&A activities. Europe’s chemicals companies are forced to act. According to the consulting company: “2016 will be the biggest year ever for chemicals M&A”.

Until now, we could witness that 2016 is up to a good start regarding M&A activities. We will review 2016 at the end of the year to see if it really became a record year. Record year or not, there we have a further consolidation in the market. Time will tell to what extent this development will be positive or not. What do you think? Leave a comment or contact me.