Secret CEO Club Meets in London as M&A Remakes Chemical Industry

  • CEOs from Europe’s biggest chemical companies gather annually
  • Clandestine meetings have hatched M&A in past, person says

A boutique hotel tucked away on a quiet street near London’s fashionable Soho neighborhood is set to become an epicenter of the chemical industry as a clandestine society of chief executives from Europe’s biggest producers gathers for an annual meeting.

An assembly of “The Circle of the Presidents of the Chemical Industry,” as the group is called, gets underway later Thursday with dinner, followed by discussions in the morning about a wide-range of topics, according to a person familiar with the matter who asked not be identified because details of the society aren’t public. Set up after World War II, the meetings have proved to be fertile ground for hatching mergers and acquisition deals within the industry, the person said.

These types of organizations aimed at building camaraderie aren’t unusual in global industries and also include the private Conquistadores del Cielo club for airline CEOs that has met regularly for decades with rituals that have included knife throwing events and cowboy suits. The U.K. gathering of chemical company CEOs comes amid an unprecedented wave of consolidation in the $4 trillion industry with a record number of deals underway this year.

Topics scheduled to be discussed in the U.K. capital include trying to get a common voice for the fragmented industry on a multitude of issues as well as more mundane subjects like health and safety, the person said, adding that many lawyers also attend the event.

Davos Chemistry

While the group’s name evokes the “Lord of the Rings” fantasy series by J.R.R. Tolkien, the meeting is more like the industry’s own mini-version of the World Economic Forum held annually in Davos, Switzerland -- minus the glare of TV cameras. The so-called circle has no website or other public forum.

Europe’s largest chemical companies include BASF SE, Covestro AG, Evonik Industries AG, Solvay SA and Syngenta AG. It could not be determined whether the CEOs of all these companies plan to attend the London event.

Global chemical companies have more than $300 billion in M&A planned as CEOs shrug off risks brought on by political uncertainty such as Brexit and the U.S. election, according to a report by AT Kearney published in March. The backlog is unprecedented, and more than twice the level of the previous all-time high set at the end of 2015, according to the management consulting firm.

Around three quarters of the outstanding tie ups concern four mega-deals including Dow Chemical Co.’s planned combination with DuPont Co., China National Chemical Corp.’s purchase of Syngenta AG, Bayer AG’s proposed takeover of Monsanto Co., and the planned combination of Linde AG and Praxair Inc.

Before it's here, it's on the Bloomberg Terminal.