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Chemical compounds Third-quarter 2010 global chemicals industry mergers and acquisitions analysis
Curates egg: The changing deal environment

Welcome to the third-quarter 2010 edition of Chemical compounds, PwCs quarterly analysis of mergers and acquisitions (M&A) in the global chemicals industry. In addition to a detailed summary of M&A activity in the third quarter of 2010, our special report takes a closer look at a global economy characterized by instability and its impact on the strategic M&A deal environment. In an effort to strengthen their core businesses and expand their footprint, companies are reconsidering foreign investment strategies. And while emerging markets offer opportunities to grow, they also present commercial risks and challenges. Like a curates egg, todays economic expectations are a mixed bag of good and bad.

Special report: Curates egg: The changing deal environment


A curate and his egg An English idiom, a curates egg comes from a cartoon in the British magazine Punch in November 1895. Over time, the phrase curates egg has evolved to mean something having a mix of good and bad qualities.
Todays global economy is like a curates egg. Economic expectations are good and bad, positive and negative. And as the US economys unpredictability generates greater concern throughout the rest of the world, chemical companies are exercising caution as they consider strategic deals in emerging markets where gross domestic product (GDP) growth is high. The concept of a mixed bag is especially relevant to the chemicals industrys M&A market. On the positive side, the volume of deals announced during the third quarter of 2010 shot up signicantly from the previous year, an indication that the global economy is stabilizing. The downside is that worries about a protracted economic recovery or another recession have many global buyers and sellers taking a wait-and-see approach to deal making. Meanwhile, chemical companies continue to focus on their core business as they look to create the capital resources necessary to grow in emerging markets. However, the valuations attached to these emerging market businesses are high, resulting in pricing gaps and difculties closing deals. Chemical companies are under stakeholder pressure to nd growth opportunities. Most commentators predict that the Western economies will be sluggish for the next several years, hence the importance of investments in Brazil, India, and China; and to a lesser extent Russia the BRIC countries where GDP growth projections for 2011 range from 4% to more than 9%.1 In addition to the BRIC countries, companies are looking at VISTA countries, which include Vietnam, Indonesia, South Africa, Turkey, and Argentina, as well as Mexico, which is becoming more attractive. Despite cash-rich balance sheets and a willingness to invest in an emerging market, many chemical corporations are still nding it difcult to expand their presence in these markets, partly due to valuation but also because shareholder visibility and nancial transparency in these countries are lacking. Although many companies have realized benets and rich rewards from foreign investment, it has come with a certain amount of risk. While emerging markets offer opportunities to grow, they also present commercial risks, such as protection of intellectual property, compliance with foreign laws and regulations, fraud and corruption, and cultural differences. And a changing deal environment adds to the challenges.

Whats driving changes in the deal environment?


Chemical companies spent much of the past two years focused on their core business and tailoring their business process and structure to become more efcient. As a result, many of these companies have excess cash on their balance sheets. Those willing to hurdle the obstacles that foreign investment presents will look to emerging markets to buy up acquisitions that are expected to strengthen their core business. An analysis of the 10 largest global chemical companies (by revenue) shows that the average amount of cash on their balance sheets in the most recent quarter is $3.68 billion, up from an average of $2.45 billion two years ago.
Average cash of chemical companies Q = most recent quarter reported, Y = one year prior, Y-2 = two years prior

4.0 3.5 3.0 US$ billions 2.5 2.0 1.5 1.0 0.5 0.0 Y-2
S&P 500 Companies

3.68 3.35 2.45 1.78

2.37

2.39

Source: IMF, PwC forecasts

Ten largest global chemical companies

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Although it appears chemical companies have ample cash on hand to nance deals, price is a critical component for success. Higher prices typically require further assessment of future cash ows so that CEOs can be comfortable moving forward with the transaction. This is especially relevant in times of economic uncertainty when there is greater emphasis on the assessment of and tolerance for risk. As companies develop and move ahead with aggressive growth strategies, they must also be focused, disciplined, and deliberate in their approach. Meanwhile, the current competitive bid process often requires companies to make decisions without the benet of full diligence providing an advantage to those companies that can quickly and effectively assess the impact of certain risks on their business case based on prior knowledge and experience. With many chemical companies focused on using M&A to build their positions in high-growth regions, those who understand emerging markets, and therefore the risks, will have a natural advantage. Caution also affects buyers within emerging markets seeking to buy low-growth assets within the United States or Europe. In these cases, skepticism about the true value of the asset often derails the deal. Many chemical companies in emerging markets are waiting to see how the US and European economies rebound during the next two quarters before investing. For example, a Chinese chemical company looking to invest in the United States saw the target price drop signicantly but continued to hold off on closing the deal in anticipation of further discounts. With 2011 GDP projections in the United States and Western Europe below 3%,2 organic growth for chemical companies is limited at best. Growth by further reducing costs is not a realistic option; most companies have already taken drastic measures to cut costs and improve operating efciencies. This explains why most global chemical companies see M&A as the most viable way to meet stakeholder expectations to grow in the current economic environment.

Chemical companies that have already made a signicant investment in emerging economies over the past 10 to 20 years are putting plans into place to improve operations and expand their presence to meet booming local demand. For example, a European chemical company recently announced plans to direct nearly 40% of its capital expenditures toward Asia and Latin America by 2012. Finally, capital markets are more liquid, making nancing a deal in the event its needed more accessible than it was a year ago.

Managing a changed deal environment


Because of the increased uncertainty, companies are structuring deals in new ways and handling them differently. Specically, many are avoiding large, staged auctions, except in cases that involve a sizable, high-prole asset. The trend today is toward one-to-one negotiations in off-market deals, where the buyer proactively identies and approaches the target. This approach allows companies to enter into condential discussions away from media scrutiny. As a result, corporations looking to divest themselves of non-core businesses can position them for a sale by identifying and brieng the potential A list buyers. In general, chemical companies have become more cautious and diligent about what they are buying. They no longer favor diversication as a global M&A theme. Instead, chemical companies are looking for deals that can provide new strategic opportunities, such as bundling services that provide their customers with solutions rather than just products, a move that could generate higher revenue and provide opportunity to leverage synergies throughout their organization. More than ever, deals today must t strategically and commercially with existing operations and drive synergistic growth.

Source: IMF, PwC forecasts

PwC

Perspective: Thoughts on deal activity in 2010


Deal activity in 2010 is in line with our expectations. While the number of deals year to date is up from 2009, we have seen fundamental differences in the type of deal activity. The graphs and charts in the following pages show an increase in the average size of deals in 2010 compared with 2009. Beginning in December 2009, we noted a considerable uptick in deal activity. This momentum came from strategic buyers that emerged from the downturn with strong balance sheets and were looking for smaller bolt-on acquisitions for their core businesses. During 2010, we have noted two changes in the type of deal activity. Initially, we observed a gradual increase in the size of the deals in our business pipeline. Secondly, we saw an increase in the level of private equity activity in the deal processes. The trends are continuing into the rst few weeks of the fourth quarter. We continue to see deals move forward at a deliberately slower pace than they did during the pre-downturn period. We believe this is partially driven by extreme caution exercised by buyers and lenders and the difculty in assessing the trends in recent nancial results. At the beginning of the downturn in 2008, the industry experienced extreme volatility in volumes, raw material margins, and selling prices. Although overall protability was down, the relationship between raw material costs and selling prices resulted in higher contribution margins per unit. This pattern remained common through the downturn, but as the economy recovers, the supply-demand ratio is having a varied effect across segments of the chemicals industry. Some continue to operate under capacity, making it difcult to assess current and forecasted margins. These issues require increased scrutiny of details to structure a reliable and accurate valuation model. An additional challenge that we see going forward will be the increased number of companies searching for good acquisition candidates. We anticipate a greater level of competition in the deal process, and the advantage will lie with the companies that: 1) proactively target acquisition candidates and ensure that they are on the list of companies that will be invited to participate in the bidding process, and 2) are prepared to move as quickly as possible with welldened diligence scopes.

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Commentary

Quarterly deal activity by number of deals (1Q093Q10)


400 Number of deals 300
295 282 252

Deal activity in third-quarter 2010 holds momentum


In line with our expectations, deal activity (by number of deals) in the third quarter of 2010 maintained the pace set in the previous two quarters. Compared with 2009, the full year run rate of deal activity during the rst three quarters for announced deals with a disclosed value is up 20%. The general improvement in the economy, the increased protability in the sector, and the trend to focus on growing core operations via bolt-on and complementary acquisitions has continued to drive M&A activity.

200 100 0

228

244

132 28

128 24

261

266

1Q09

88 10

2Q09

89 21

3Q09

4Q09

1Q10

2Q10

3Q10

Total announced deals Announced deals w/disclosed value Total announced deals w/disclosed value >= $50 million

125 22

104 24

119 29

Quarterly deal activity by total deal value (1Q093Q10)


60 45 US$ billions 30
18 51

$39.8 billion mega-deal boosts deal value in third quarter


Deal value in third-quarter 2010 increased signicantly with the pending Potash Corp./BHP Billiton PLC mega-deal, with a value of $39.8 billion (refer to page 10 for details). Excluding this deal, the underlying total deal value in the third quarter is $11.3 billion. The year-to-date 2010 total value already exceeds total deal value in 2009. In general, we are starting to see a trend back toward larger deals, with average deal value at $90 million in third-quarter 2010 (excluding the impact of the aforementioned mega-deal) compared with $82 million in 2009. We expect this upward trend in deal value to continue in line with higher company protability and as the buzz about M&A activity in the sector continues.

12 10 2 1

15
2 1 2

2 1 3

3 2 3

24

10 3 3 3

1 3

1Q09

2Q09

3Q09

4Q09

1Q10

2Q10

3Q10

Total deals with a disclosed value At least $1 billion At least $500 million but less than $1 billion At least $50 million but less than $500 million

1 3

46

PwC

Value of large deals in 3Q10 dominated by one mega-deal


Three large deals with a value greater than $1 billion were announced in the third quarter of 2010, putting the total for 2010 at 10 deals for a value of $66.6 billion. This value is dominated by the Potash Corp./BHP Billiton PLC deal, expected to be worth $39.8 billion. Excluding this deal, large deals totaled $27.6 billion for year-to-date 2010, which surpasses the total large deal value for all of 2009. This upturn is consistent with our expectations for M&A activity in 2010 and activity in the coming periods.

Large deals (20062009, 1Q-3Q10) Value greater than $1 billion (and number of deals in category)
25 Number of deals 20 15
2 3 4 1

1 1

10 5 0
11 14 11 5 1 1 4 2 2

2006

2007

2008

2009

1Q10

2Q10

3Q10

$10+ billion $510 billion $15 billion

Deal activity by type of acquirer


Strategic investors continue to outpace nancial investors. Consistent with our expectations, nancial investor deal activity remains lower than during the pre-downturn period. While the nancial markets continue to recover, it will take time for the ow of debt nancing to return to historical levels or prove more advantageous to nancial investors. As the economy improves, we expect to see nancial investor activity on the sell side as some look to sell investments they were forced to hold during the economic downturn. We continue to recommend that companies analyze the portfolio of private equity investors for potential acquisition candidates. It can be assumed that many of the companies will be available for sale in the foreseeable future.

Deal value by type of acquirer (20062009, 1Q-3Q10) Measured by percentage of deal value (actual deal value in billions, for deals with a disclosed value, shown in chart)

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

13.8

26.5

10.7

4.2

2.6

1.9

5.2

71.6

106.6

60.9

29.9

21.0

8.0

45.8

2006

2007

2008

2009

1Q10

2Q10

3Q10

Financial Investors (banks and investment firms) Strategic Investors

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Regional distribution of third-quarter 2010 deals


The third quarter regional distribution of deal activity has been inuenced by deals in the Asia Pacic region when referring to the number of deals and by the Potash Corp./BHP Billiton PLC deal when looking at the distribution of regional deals by value. Increased deal activity within Asia is expected, with all but one deal announced being within its regional borders. At the country level, approximately one-third of the deals are cross-border deals with the other two-thirds being deals within country. This level of cross-border deal activity in 3Q10 is consistent with total deal activity since 2006.

Number of deals (3Q10) by target nation Measured by number of deals worth $50 million or more

Number of deals (3Q10) by acquirer nation Measured by number of deals worth $50 million or more

9.1% 13.6%

18.2%

13.6% 68.2% 77.3%

Value of deals (3Q10) by target nation Measured by value of deals worth $50 million or more

Value of deals (3Q10) by acquirer nation Measured by value of deals worth $50 million or more

0.7% 19.4% 16.9% 2.6%

80.5% 79.9%

Asia Pacific

North America

Western Europe

Middle East

South America

Africa

Eastern Europe

PwC

Deal activity remains consistent regardless of economy


To provide a longer-term perspective of the level of deal activity, we analyzed the volume and value of deal activity during the past 13 years. In contrast to the value of transactions, which varied substantially across the period, the volume of transactions was relatively stable, even during economic downturns. This is due to a consistent level of small deal activity in the chemicals industry, which is driven by companies using M&A as a tool to continually reposition their business. During periods of economic downturn, large deal volume drops signicantly, reducing total deal value. As the economy continues to recover, we are seeing an upturn in the level of large deal activity, which is expected to continue for the remainder of 2010.

13-year comparison deal activity, 1998 to 2010

Total annual deal value ($ billions)

1600 1400 1200 1000 800 600 400 200 0


2009 YTD 2010 Annualized 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

140 120 100 80 60 40 20 0

Number of deals Deal value

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Total annual number of deals


7

160

Large deals in 2009


Month announced Target name Feb CF Industries Holdings Inc Jan Jul Nov Apr Oct Feb Terra Industries Inc Nufarm Ltd Mitsubishi Rayon Co Ltd Morton International Inc Target nation United States United States Australia Japan Acquirer name Agrium Inc CF Industries Holdings Inc Sinochem Corp Acquirer nation Canada United States China Status Withdrawn Value of transaction in US$ bln 5.60 Category Fertilizers & Agricultural Fertilizers & Agricultural Fertilizers & Agricultural Commodity Specialty Commodity Specialty

Completed 4.07 Withdrawn 2.29

United States Brazilian Renewable Energy Co Brazil NOVA Chemicals Corp Canada

Mitsubishi Chemical Hldgs Japan Completed 1.91 Corp K+S AG Germany Completed 1.68 ETH Bioenergia SA IPIC Brazil Completed 1.39 0.50*

Utd Arab Pending Em

*This transaction is included in our data at this value based on data parameters. However, the enterprise value is substantially larger, standing at $2.3 billion when including assumed debt.

Large deals in rst-quarter 2010


Month announced Target name Feb Airgas Inc Jan Feb Mar Feb Quattor Participacoes SA Terra Industries Inc Styron Corp Fosfertil Target nation United States Brazil United States United States Brazil Acquirer name Air Products & Chemicals Inc Braskem SA Yara International ASA Bain Capital Partners LLC Mineracao Naque SA Acquirer nation United States Brazil Norway United States Brazil Status Pending Value of transaction in US$ bln 7.47 Category Industrial Gases Other Fertilizers & Agricultural Commodity Fertilizers & Agricultural

Completed 4.13 Withdrawn 4.10

Completed 1.63 Intended 1.03

PwC

Large deals in second-quarter 2010


Month announced Target name Jun National Starch LLC Jun Jun Albaugh Inc Cognis Holding GmbH Target nation United States United States Germany Acquirer name Corn Products International Makhteshim Agan Industries Ltd BASF SE Acquirer nation United States Israel Status Pending Withdrawn Value of transaction in US$ bln 1.30 1.28 0.86* Category Specialty Specialty Specialty

Germany Pending

* This transaction is included in our data at this value based on data parameters. However, the enterprise value is substantially larger, standing at $3.8 billion when including assumed debt and certain liabilities. This transacation is not included in references to large deals elsewhere in this report.

Large deals in third-quarter 2010


Month announced Target name Aug Potash Corp of Saskatchewan Sep Aug JNFL AWB Ltd Target nation Canada Japan Australia Acquirer name BHP Billiton PLC Investor Group Agrium Inc Acquirer nation Status United Pending Kingdom Japan Completed Canada Intended Value of transaction in US$ bln 39.76 4.75 1.10 Category Fertilizers & Agricultural Other Fertilizers & Agricultural

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Large deal summary for third-quarter 2010


Potash Corp. of Saskatchewan/BHP Billiton PLC BHP Billiton PLC of the UK, a unit of BHP Billiton Ltd., through BHP Billiton Development 2 (Canada) Ltd., launched a hostile tender offer to acquire the entire share capital of Potash Corp. of Saskatchewan Inc. (Potash), a Saskatoon-based potash mining company, for CAD 135.655 (USD 130) in cash per share, or a total value of CAD 41.491 billion (USD 39.761 billion). The offer was conditioned upon at least 50% of shares being tendered. JNFL/Investor Group An investor group comprised of Tokyo Electric Power Co. Inc., Kansai Electric Power Co. Inc., Chubu Electric Power Co. Inc., Kyushu Electric Power Co. Inc., Tohoku Electric Power Co. Inc., Chugoku Electric Power Co. Inc., Shikoku Electric Power Co. Inc., Japan Atomic Power Co. Ltd., Hokkaido Electric Power Co. Inc., Hokuriku Electric Power

Co., Hitachi Ltd., Mitsubishi Heavy Industries Ltd. and Toshiba Corp. raised its interest to 91.657% from 24.99% by acquiring 66.667% interest, or 40 million newly issued shares, in Japan Nuclear Fuel Ltd., a Kamikita, Aomoribased manufacturer and wholesaler of nuclear fuel, for JPY 0.01 million (USD 118.82) in cash per share, or a total value of JPY 400 billion (USD 4.752 billion) in cash, in a privately negotiated transaction. AWB Ltd./Agrium Inc. Agrium Inc. of Canada denitively agreed to acquire the entire share capital of AWB Ltd., a Melbourne-based provider of grain management and marketing services, via a tender offer for AUD 1.5 (USD 1.346) in cash per share, or a total value of AUD 1.226 billion (USD 1.1 billion), via scheme of arrangement. Originally, Agrium planned to launch an unsolicited challenging offer to acquire the entire share capital of AWB. Previously, GrainCorp. Ltd. agreed to merge with AWB.

10

PwC

PwC spotlight

Results from PwCs 13th annual Global CEO Survey (2010) showed that chief executive ofcers (CEOs) from large companies were more likely than those from smaller companies to complete an acquisition or enter a strategic alliance. Leaders of large corporations also were planning deals and alliances in the coming year, according to the survey released in January 2010. And many of these planned transactions were expected to be cross-border deals because of the opportunities available in emerging markets. As growing economic interdependencies drive more and more companies to venture beyond their own countrys borders to nd their ideal acquisition candidate, the appeal of cross-border deals will continue to grow. The PwC Corporate Finance network closes, on average, a deal a day around the globe in midmarket M&A transactions, and more than 40% are cross-border deals. Savvy acquirers learn lessons from each successful cross-border transaction and use that knowledge to navigate effectively through obstacles such as questionable business practices, inconsistent bookkeeping methods, political instability, and poor environmental controls. And while the challenges of cross-border deals differ depending on the size of the business and the country, leading companies conduct deals using essentially the same processes: establishing the strategic purpose for each acquisition;

managing and monitoring employee engagement; addressing change management issues; applying best practices for integration; and tracking progress toward achieving the desired cultural end state of the new company.3

In the past decade, we provided in-depth nancial advice on more than 300 announced deals globally per year with an average deal size of $135 million. More than 40% of those deals were cross-border. We have extensive industry capabilities, local market knowledge, and a proven track record advising both corporate clients and institutional investors, all of which reect our ongoing quest for leading practices. Thomson Reuters reported that PwC Corporate Finance completed the second-highest volume of deals globally in the midmarket for the 10 years to December 31, 2009. We can bring the strength of the PwC Corporate Finance network to bear by sourcing acquisition targets globally, including the BRIC countries and other emerging markets.

How PwC Corporate Finance4 can help


PwCs award-winning Corporate Finance (more commonly known as Investment Banking in the US) practice provides independent nancial advice to corporations, institutional investors and governments seeking to buy or sell businesses, raise new nancing, or improve the efciency of the funding on their balance sheets. We work to build long-term relationships with our clients by looking out for their best interests rather than simply focusing on closing deals. We are independent of the source of nance, and so we differentiate ourselves through intellectual, not nancial, capital. These factors, together with our deep industrial products sector knowledge and international network, combine to make great deals better. Our international network of Corporate Finance advisors makes the difference because: We have a talented team of more than 1,000 Corporate Finance professionals operating in more than 60 countries; we can deploy our professionals whenever and wherever you are doing deals.

As experienced deal makers, we offer integrated solutions with full access to PwCs due diligence, tax, and post-deal professionals providing the full range of deal support from identication and strategic planning to post-merger integration.

3 4

PwC Global Best Practices, Analyze and capitalize on cross-border opportunities

Corporate Finance services in the US are performed by PricewaterhouseCoopers Corporate Finance LLC, a registered broker dealer PricewaterhouseCoopers Corporate Finance LLC is owned by PricewaterhouseCoopers LLP, a member rm of the PricewaterhouseCoopers Network, and is a member of FINRA and SIPC.

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Chemical company case study: Sell-side capabilitiesNon-core disposals


Client: Global chemical company
Issue A global chemical company based in Europe made a strategic decision to sell one of its non-core business units located in the United States but needed help planning, executing, and nalizing the divestment in a manner to maximize proceeds. In particular, the client needed assistance nding an appropriate global buyer, determining valuation, and anonymously soliciting interest from global buyers, as well as presenting the non-core business in the best light. Complicating the transaction, the nancial records of the business to be divested were integrated into the nancial records of the clients other operations and needed to be carved out. To help the client nd the right buyer for its business unit, PwCs Corporate Finance practice conducted a global sales process and contacted more than 50 potential buyers in the United States, Canada, Europe, Brazil, South Africa, and Asia; including India, China, and Japan. PwC Corporate Finance assisted in understanding and positioning the business for sale, acting as the initial point of contact with the potential buyers, and assisting with the negotiations around price and the other major terms in the sale and purchase agreement. The sale process included the negotiation of multiple ancillary supply, tolling, and transition service agreements. A PwC Transaction Services engagement team assisted and advised the client as it drafted separate and accurate nancial records for the business unit to be divested. These nancial statements formed the basis from which potential buyers were then asked to submit offers for the business. Impact The Corporate Finance engagement teams sale process yielded nearly a dozen indicative offers. Four were from the United States and Canada, four were from Asia, and three were from Europe. Six of those offers were nal. Most of the offers were from strategic buyers, and the deal was closed with an Indian buyer for a US asset owned by a European client. The PwC sell-side diligence information withstood scrutiny from multiple buyers, and the client was able to successfully achieve its divestiture objectives. The client sold the business to a buyer for a price within 3% of the top end of the PwC Corporate Finance teams preliminary valuation range.

Action

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PwC

Chemical company case study: Buy-side capabilitiesAcquisition identication and advice


Client: Global chemical company
Issue A US chemical company wanted to enter a high-growth market as a way to meet stakeholder demands to accelerate growth. The client had its sights set on making an acquisition in China, but had limited knowledge of the country and how to nd a suitable target. To move its plans for strategic growth forward, the client informed PwC Corporate Finance in the United States of its global acquisition criteria. PwC Corporate Finance US reached out to the global Corporate Finance network with the acquisition criteria. As a result, PwC Singapore identied a potential acquisition target that was based in China and owned by a private equity house in Singapore. Due to an existing relationship between PwC Singapore and the private equity house, the Corporate Finance engagement team was able to introduce the US client to the target on an exclusive basis without the deal going to an auction. The rms Transaction Services practice in both the US and China also provided the due diligence services to the US client. The US client, which had limited previous exposure or experience in the Asian market, was given an opportunity to buy a business in China. The PwC engagement teams assisted in the negotiations, including negotiations on pricing and structure, as well as the due diligence on the acquisition target. Because the deal was handled as a one-to-one off-market transaction, the client acquired the Chinese business on an exclusive basis at an acceptable price.

Action

Impact

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PwCs chemicals experience

Deep chemicals experience


PwC continues to have the leading market share in the industry. Our Chemicals Industry practice is comprised of a global network of more than 2,900 partners and client service professionals. Our chemicals team encourages dialogue on emerging trends and issues by holding conferences for industry executives. PwC is also a sponsor of leading industry conferences and frequently authors articles for, or is quoted in, leading industry publications. Our involvement with these organizations represents PwCs commitment to furthering industry dialogue with chemicals industry leaders. Our professionals are concentrated in areas where the chemicals industry operates today and in the emerging markets where the industry will operate in the future.

Quality deal professionals


PwCs Transaction Services practice, with more than 6,500 dedicated deal professionals worldwide, has the right industry and functional experience to advise you on all factors that could affect the transaction, including market, nancial accounting, tax, human resources, operating, IT, and supply chain considerations. Teamed with our Chemicals Industry practice, our deal professionals can bring a unique perspective to your deal, addressing it from a technical aspect as well as from a chemicals industry point of view.

Global connection
PwCs Chemicals Industry practice is a part of an Industrial Products group that consists of more than 32,000 professionals, including approximately 17,000 providing Assurance services, more than 8,000 providing Tax services, and 7,000 providing Advisory services.

Europe 14,200 Industrial Products professionals 1,040 Chemicals industry professionals North America & the Caribbean 5,000 Industrial Products professionals 470 Chemicals industry professionals Asia 8,300 Industrial Products professionals 1050 Chemicals industry professionals

Middle East & Africa 1,200 Industrial Products professionals 75 Chemicals industry professionals South America 2,300 Industrial Products professionals 235 Chemicals industry professionals

Australia & Pacic Islands 1,300 Industrial Products professionals 105 Chemicals industry professionals

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PwC

Contacts

PwCs Chemicals Industry practice


PwCs Chemicals Industry practice is a global network of professionals who provide industry-focused Assurance, Tax, and Advisory services to more than 200 public and private chemical companies. Our leadership team consists of: Global Chemicals leader US Industrial Products marketing manager
Gina DockiewiczFlorham Park, NJ, US Phone: 1.973.236.4648 E-mail: gina.dockiewicz@us.pwc.com

Tracey StoverDenver, CO, US Phone: 1.720.931.7466 E-mail: tracey.a.stover@us.pwc.com

Global and US Chemicals Tax leader


Michael BurakFlorham Park, NJ, US Phone: 1.973.236.4459 E-mail: michael.burak@us.pwc.com

Germany Chemicals leader

Eckhard SprinkmeierMunich, Germany Phone: 49.0211.981.7418 E-mail: eckhard.sprinkmeier@de.pwc.com

Global Chemicals Advisory leader


Volker FitznerFrankfurt, Germany Phone: 49.69.9585.5602 E-mail: volker.tzner@de.pwc.com

France Chemicals leader

Stephane BassetParis, France Phone: 33.01.56.57.7906 E-mail: stephane.basset@fr.pwc.com

Global Chemicals client service advisor


Alison McNerneyNew York, NY, US Phone: 1.646.471.1747 E-mail: alison.mcnerney@us.pwc.com

Central and Eastern Europe Chemicals leader


Pawel PeplinskiWarsaw, Poland Phone: 48.22.523.4433 E-mail: pawel.peplinski@pl.pwc.com

US Chemicals leader

Anthony J. ScamuffaPhiladelphia, PA, US Phone: 1.267.330.2421 E-mail: anthony.j.scamuffa@us.pwc.com

United Kingdom Chemicals leader


Richard BunterLondon, UK Phone: 44.0.191.269.4375 E-mail: richard.bunter@uk.pwc.com

US Chemicals Transaction Services director


Bruce ChalmersPhiladelphia, PA, US Phone: 1.410.659.3488 E-mail: bruce.chalmers@us.pwc.com

United Kingdom Chemicals Transaction Services director


Mike ClementsLondon, UK Phone: 44.0.113.289.4493 E-mail: mike.clements@uk.pwc.com

US Chemicals Transaction Services director


Simon BradfordNew York, NY, US Phone: 1.646.471.8290 E-mail: simon.bradford@us.pwc.com

Greater China Chemicals co-leader


Jean SunBeijing, China Phone: 86.10.6533.2693 E-mail: jean.sun@cn.pwc.com

US Industrial Products director

Neelam SharmaFlorham Park, NJ, US Phone: 1.973.236.4963 E-mail: neelam.sharma@us.pwc.com

Greater China Chemicals co-leader


Xiaogang WangBeijing, China Phone: 86.10.6533.2662 E-mail: xiaogang.wang@cn.pwc.com

US Industrial Products sector analyst


Tom HaasFlorham Park, NJ, US Phone: 1.973.236.4302 E-mail: thomas.a.haas@us.pwc.com

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PwCs global Transaction Services practice


PwCs Transaction Services practice offers a full range of Tax, nancial, business, Assurance, and Advisory capabilities covering acquisitions, disposals, private equity, strategic M&A advice, advice on listed company transactions, nancing, and public/ private partnerships. The team consists of:

PwCs Research and Analytics group


Industrial Products Research and Analytics manager
Sean GaffneyTampa, FL, US Phone: 1.813.348.7461 E-mail: sean.gaffney@us.pwc.com

Global Transaction Services leader


John DwyerLondon, UK Phone: 44.0.20.721.31133 E-mail: john.p.dwyer@uk.pwc.com

PwC Corporate Finance Global Network


For Corporate Finance services in the US please contact: US Industrial Products Corporate Finance Leader
PricewaterhouseCoopers Corporate Finance LLC Rakesh Kotecha +1.312.298.2895 rakesh.r.kotecha@us.pwc.com

US Transaction Services leader

Martyn Curragh New York, NY, US Phone: 1.646.471.2622 E-mail: martyn.curragh@us.pwc.com

Europe Transaction Services leader


Volker StrackFrankfurt, Germany Phone: 49.69.9585.1297 E-mail: volker.strack@de.pwc.com

For Corporate Finance services outside the US please contact: Global Corporate Finance Leader
Chris Hemmings +44.20.780.45703 chris.hemmings@uk.pwc.com

Asia-Pacic Transaction Services leader


Chao Choon OngSingapore Phone: 65.6236.3018 E-mail: chao.choon.ong@sg.pwc.com

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PwC

Methodology

Chemical compounds is an analysis of deals in the global chemicals industry. Deal information was sourced from Thomson Reuters using the Thomson-dened industry sector of Chemicals and Allied Products for targets, and other selected upstream and downstream industries (e.g., Oil & Gas, Mining, Drugs, etc.) acquired by companies that are part of the Thomson-dened Chemicals and Allied Products designation. This analysis includes all mergers and acquisitions for disclosed or undisclosed values, leveraged buyouts, privatizations, minority stake purchases and acquisitions of remaining interest announced between January 1, 2006 and September 30, 2010, with a deal status of completed, intended, partially completed, pending,

pending regulatory approval, seeking buyer, seeking buyer withdrawn, unconditional (i.e., initial conditions set forth by the acquirer have been met but deal has not been completed) or withdrawn. Geographic categories generally correspond to continents with exceptions for Australia (included in the Asia Pacic category), Europe (divided into Western and Eastern categories based upon UN denitions) and the Middle East (dened as a separate category based upon US CIA World Factbook). Where the number of deals is referenced in this analysis it means the number of all deals with disclosed or undisclosed values unless otherwise noted.

Chemical compounds

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