Chemical M&A to Remain High as Valuations Hold Up, Valence Says

Merger and acquisition activity in the global $3.8 trillion chemical industry will remain “robust” this year as cash-rich companies jostle with private equity for assets, according to research by Valence Group.

With DuPont Co. (DD) and Cytec Industries Inc. (CYT) among the companies poised to sell businesses, the average deal size for 2012 may match the levels of the past two years, said Valence, which has advised on more than 200 chemicals and materials deals.

“With little discernible volume difference from the first quarter to the second quarter and with deal volume tracking 2010 levels, as well as continued acquisition appetite in the market and profitability remaining strong, the short term chemicals M&A market is expected to remain robust,” said Valence, which produces indices to track valuations and other trends.

There are no indications that the valuation mutliples being placed on assets are slipping, Valence said.

To contact the reporter on this story: Andrew Noel in London at anoel@bloomberg.net

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