“We don’t foresee large deals in SA in 2020, except for discrete assets disposals.”
Low GDP growth has dampened mergers and acquisitions in SA’s chemicals sector which is unlikely to see large-scale transactions in 2020, according to a report from one of the world’s largest consulting firms.
Santos said the scope for M&A activity in SA was limited because the chemicals sector was dominated by a handful of companies: Sasol, AECI, Omnia, Afrox and French company Air Liquide. “A transaction in the SA context should involve one of these companies,” he said. Chemicals group AECI said in July it had sold its 50% shareholding in chemicals distributor Crest Chemicals to joint venture partner and global chemical distribution firm Brenntag for R390m.
The number of deals in the Middle East increased six times and the value of deals grew three times. “The reasons for this are the strategic orientation towards downstream integration into chemicals by key players, diversification of local economies, and the search for foreign targets to secure outlets for local hydrocarbon resources,” AT Kearney said.
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