future of chemicals ix

7262019 Future of Chemicals IX

httpslidepdfcomreaderfullfuture-of-chemicals-ix 124

How MampA will shapethe competitivelandscape

Future ofchemicals IX



2 Strategyamp

Berlin

Matthias Baumlumler Partner+49-30-88705-852matthiasbaeumlerstrategyandpwccom

Chicago

Eduardo AlvarezSenior Partner+1-312-578-4774eduardoalvarezstrategyandpwccom

Dallas

John Corrigan Partner+1-214-746-6558

johncorriganstrategyandpwccom

DC

Peter Bertone

Senior Partner+1-703-682-5719peterbertonestrategyandpwccom

Dubai

Andrew Horncastle Partner+971-4-390-0260andrewhorncastlestrategyandpwccom

Dubai

David Branson Executive Advisor+971-4-390-0260davidbransonstrategyandpwccom

Duumlsseldorf

Joachim RoteringSenior Partner+49-211-3890-250

joachimroteringstrategyandpwccom

Sven Vallerien Partner+49-211-3890-260svenvallerienstrategyandpwccom

Frankfurt

Marcus Morawietz

Partner+49-69-97167-467

marcusmorawietzstrategyandpwccom

Hong Kong

Krishnan Narayanan

Senior Executive Advisor+852-3182-7192krishnannarayananstrategyandpwccom

Houston

Jayant Gotpagar Partner+1-713-650-4107

jayantgotpagarstrategyandpwccom

Juan Trebino Partner+1-713-650-4151

juantrebinostrategyandpwccom

London

Andrew Clark Partner+44-20-7393-3418andrewclark strategyandpwccom

New York

Richard Kaueld Partner+1-212-551-6582

richardkaueldstrategyandpwccom

Satildeo Paulo

Arthur Ramos

Partner+55-11-5501-6229arthurramosstrategyandpwccom

Dr Marcus Morawietz isa partner with Strategyampbased in FrankfurtHe focuses on growthstrategies business modeldesign innovation supplychain optimization andtransaction support for thechemicals industry

Iris Herrmann is aprincipal with Strategyampbased in Munich Shehas broad experience instrategy development and

implementation as wellas operations combined

with a perspectiveon organizationaltransformation andchange management

About the authorsContacts

This report was originally published by Booz amp Company in 2013



3Strategyamp

MampA activity has signicantly shaped the chemical industry landscapein the recent past and it will continue to do so Chemicals companiesare constantly in quest of growth in an industry that oers ever-fewerand ever-smaller attractive growth segments and where incumbentsface greater competition from upstarts in developing markets

Companies will need to execute strategic transactions in order toquickly enter into and occupy new market segments that enable burstsof growth rather than opting for organic growth in a given marketMampA will remain a strategic instrument in the industry howeverchemicals players need to make it an integral part of their businessstrategy To succeed in this environment they must build the rightcapabilities along the full MampA life cycle and move toward the largelyunknown territory of cross-regional deals

Executive summary



4 Strategyamp

In the 1990s many chemicals companies operated with a high level ofintegration along the value chain Over the last two decades howeverthe industry has faced sizable challenges due to globalization marginpressure commoditization and a reduced ability to innovate In theaggregate these trends have led to greater complexity Companies haveresponded through MampA activity with three goals in mind focusing thebusiness around core competencies reshaping the business portfolio andselectively entering new markets or regions ( see Exhibit 1)

Strategic activity but littleconsolidation

Chemicals value chain

Hoechst

Oil amp gas Petro-chemicals

Basechemicals

Specialtychemicals

Finechemicals

Customerindustries

1990s

TiconaCelanese Clariant + Suumld-Chemie

Invista (Koch)

Specialty

players

Basic chemicals

players Syngenta

Bayer CropScience

BASF

Sabic

Reliance

Emerging

players

High level of

integration

and value

chain

coverage

Diversified

landscape

due to

differentvalue

chain

coverage

Emergence

of newintegrated

players

Today

Industry structure and drivers

Companies

sought size amp

diversification

Companies

seek to

optimize

their portfolio

with a focuson core

competencies

Integrated

players

Arkema

IneosBP

Total

Oil amp gas

players

Total

Bayer

DuPont

ICI

BASF

Dow Chemical

DuPont

Lanxess

Bayer MaterialScience

Sabic

Reliance

Akzo NobelICI

Exhibit 1

Structural changes since 1990 have led to a more segmented industry simpled

Source Strategyamp



5Strategyamp

This trend was driven by the major oil and gas operators many of which

divested their chemicals operations For example BP sold itspetrochemicals business unit Innovene to privately owned UKcompany Ineos in 2005 Similarly the industrial chemicals player Arkema was created in 2004 when French oil major Total restructured itschemicals business

At the same time formerly integrated chemicals players have reshapedtheir business portfolio to become more focused on specic segments Forexample Dow Chemicalrsquos acquisition of Rohm amp Haas in 2009 wastargeted at enhancing the companyrsquos specialty portfolio Similarly AkzoNobel purchased ICI in 2008 as part of its strategy to gain market share inthe architectural paint sector and to expand its geographic presenceespecially in China

Hoechst is another even more striking example The company has

undergone a series of mergers and acquisitions in the eort to restructure

its business portfolio and overcome structural weaknesses in innovationcapabilities and economic resilience Starting in the 1990s Hoechst solda range of business units such as lab and industrial chemicals cosmetics(Schwarzkopf sold to Henkel Jade Cosmetics to LrsquoOreal) andengineering company Uhde (bought by ThyssenKrupp) To put a strongeremphasis on pharmaceuticals Hoechst acquired Marion Merrell Dow forUS$71 billion in 1995 In the following years the companyrsquos remainingchemicals activities were bundled and spun o into Celanese Havingfocused its portfolio on pharma and agrochemicals activities throughthese restructuring eorts Hoechst merged with Rhocircne-Poulenc to found Aventis which nally disappeared as an independent company through

its merger with Sano in 2004

Emerging markets have also impacted MampA strategies recently Chemicalscompanies from the Middle East China and India are now among thelargest chemicals players in the world by sales The rapidly expandingeconomies in these regions along with pressing demand for chemicalsproducts have driven the growth of these companies even as the economicdownturn and lackluster recovery in the US and Europe have reduced thegrowth rates of players in developed economies ( see Exhibit 2 next page)

This growth has been mirrored by a corresponding shift in transactionactivity among regions China played an insignicant role in thechemicals MampA market 10 years ago yet it currently accounts for roughly30 percent of the transactions in terms of deal numbers Deal value hasincreased over the same period ( see Exhibit 3 next page)

The number of cross-regional deals however is still surprisingly low

Targets are mostly located in the same region as the acquiring company( see Exhibit 4 page 7 )

Emerging

markets have

impacted MampA

strategies

recently



6 Strategyamp

Top chemicals companies by revenue

(euros in billions) 20112002

Shell

LyondellBasell

Dow Chemical

Sinopec

BASF

ExxonMobil

Sabic

LG Chem

Akzo Nobel

BayerTotal

Evonik

Ineos

DuPont

Mitsubishi Chemical

Lyondell

Ineos

Reliance

Sinopec

Sabic

Akzo Nobel

Degussa

BP

Shell

ExxonMobil

Bayer

Total

BASF

DuPont

Dow Chemical

13

14

28

47

40

39

46

51

61

50

39

36

30

15

16

19

21

14

21

29

3

5

6

8

8

10

12

14

16

17

19

19

28

28

29

15

19

14

11

12

Trend

1000

15

10

0

5

1200 20

0

400

600

800

200

1106

18

82

88

2009

807

13

87

2008

1071

10

90

2007

1191

10

90

292

1034

2006

992

10

90

2005

830

13

87

2004

718

8

92

2003

659

8

92

2002

709

13

579

2001

581

1

99

20000

100

Number of deals

201212

16

Value of deals(US$ in billions)

84

2011 2013 YTD

1143

15

85

2010

87

Exhibit 2

Chemicals operators from emerging markets are climbing the ranks

Exhibit 3

Chinese chemicals companies have been increasingly in play

Note Chemicals revenue

only Based on constant2011 dollarndashto-euroexchange rate

Source Chemical ampEngineering News ICISBloomberg companyinformation Strategyamp

Source Bloomberg

Emerging playerTraditional player

Value of deals -Chinese acquirer

Chinese acquirerNon-Chinese acquirer

Number of deals



7Strategyamp

Looking at China this disparity mdash greater deal activity but fewer cross-border deals mdash mirrors the ongoing consolidation and emergence ofstrong national players across almost all major industries and sectorsThough this is a natural eect in a maturing industry it is stronglyaccelerated in China The Chinese government is pushing for industryconsolidation and sets high requirements (regarding the use of state-of-the-art technology and minimum scale of assets for example) for newand even existing players Thus it is driving the development of national

champions that will be able to compete eectively in global marketsState-controlled access to capital and control over operating licensesfurther drives the government-favored industry structure

The agrochemicals industry is one clear example of this A period ofsomewhat chaotic development led to high numbers of small andmedium companies but the Chinese government is now putting pressureon the sector to consolidate The ldquoChina Pesticides Industry Planrdquo aims toreduce the number of rms and ensure that the 20 largest hold a marketshare of around 80 percent primarily to increase scale and eciency in

operations processes and RampD

Besides the local consolidation Chinese players are also becomingincreasingly active in cross-border deals to capture opportunities in keymarket segments Recent examples of acquisitions undertaken by Chinesecompanies are polyurethaneisocyanate player BorsodChem

agrochemicals company Makhteshim Agan and Elkem one of theleading producers of solar-grade silicon silicon and special alloys for thefoundry industry

Region of acquirer

Region

of

target

Rest ofworld

75

Indiasubcontinent

86

GreaterChina

96

NE Asia

80

North America

72

Europe

84

Exhibit 4

Most deals involve an acquirer and target in the same region

Source Dealogic

EuropeNorth AmericaNE AsiaGreater ChinaIndia subcontinentRest of world



8 Strategyamp

Realignment in areas where scale matters

Globally chemicals MampA activity in the past decade focused onrealigning business portfolios and as a result the level of consolidation

in the industry has remained relatively constant The 10 largestcompanies had a joint market share of roughly 11 percent in 2002 and 13percent today according to ICISCec However the recent MampA activity

has helped companies systematically consolidate segments along the value chain

Regarding RampD crop protection is a good example Growth opportunitiesresult from two key levers (1) developing new active ingredients seedsor traits which in turn requires building biotechnology researchcapabilities and (2) capturing growth and access markets in emergingcountries Monsantorsquos expenses for research and development more thandoubled from 2005 to 2010 (from $600 million or 9 percent of net salesto $12 billion or 11 percent of net sales excluding the acquisition of

in-process RampD) As investments in highly specic elds get bigger therisk associated with these investments increases as well and exploring

new elds in research might become a big bet for a company Thisuncertainty makes buying capabilities or development pipelines andorbuilding alliances more attractive to players searching for growth

As a result the agrochemicals sector has shown signicant consolidationin the past 15 years ( see Exhibit 5 next page) Together the top threeplayers currently control more than half of the market In fact there arefew MampA opportunities in crop protection left mdash antitrust regulations would likely play a factor in any remaining deals across major

agrochemicals companies

Accordingly recent deals of agrochemicals majors have focused onsmaller biotech and seed companies to participate in seed market growthand complement the portfolio in this area In this environment mdash where

MampA opportunities are scarce mdash alliances and cooperation betweenmajor agrochemicals players are increasingly relevant Recent examplesinclude Syngentarsquos partnerships with DuPont Bayer CropScience Dowand others to complement its crop protection and seed portfolio Inaddition the combination of scarce potential targets and well-capitalized

growth-aggressive strategic buyers has raised the median transactionmultiples to record levels

The other principal area of consolidation due to MampA activity in therecent past has been in asset and cost-eectiveness as well as gainingfeedstock access In petrochemicals for instance cost competitiveness iscrucial to operate global-scale production plants supplying downstreambusinesses Reducing operating costs requires both economies of scaleand better utilization of assets The recent merger of Thailandrsquos PTTChemical with its aliate PTT Aromatics and Rening (PTTAR) shows

There are

few MampA

opportunities

in crop

protection left



9Strategyamp

this trend The deal created one of Asiarsquos leading petrochemicals and

rening companies According to statements from the PTT group themove improves the companyrsquos competitiveness by leveraging signicanteconomies of scale and thus reducing unit costs The announcement ofinterest from Reliance Industries in buying Haldia Petrochemicals inIndia is in a similar vein and would consolidate a large share of theIndian polyolens market

The pressure to get larger and generate economies of scale increasedtremendously with the market entry of companies from regions that haveadvantages in hydrocarbon feedstock such as Sabic and Sipchem Theseplayers have built world-class plants using modern technology andbrought them online signicantly raising the stakes for establishedplayers In particular smaller and older assets such as the remainingEuropean crackers struggle to stay commercially viable for the futureMampA among such companies is thus designed to combine assets improve

upstream integration and create greater scale and access to markets

along the relevant value chains

Revenue from crop protection including seeds and traits(euros in billions)

1998

Share of global market controlled by top three~35

2011

~60

BASF

Dow

DuPont

BayerCropScience

Monsanto

Syngenta

18

Dow AgroSciences 18

Rohm amp Haas 04

Pioneer 14

American CynamidAHP 16

BASF

DuPont 19

Bayer 20

Rhocircne-Poulenc 20

AgrEvo 21

Zeneca 22

Monsanto 30

Novartis 39

Exhibit 5

The agrochemicals sector has shown signicant consolidation

Note Excludingconventional seeds marketFixed exchange rate ofUS$133 per euro Swissand British companyreports calculated in US$

Source Analyst reportsannual reports Strategyamp



10 Strategyamp

The current landscapetransactions gaining

momentum againToday we see MampA regaining momentum After a period of economiccrisis with a strong focus on cost-cutting and eciency strategies in thechemicals industry the economic rebound and a more positive industryoutlook have created a more encouraging climate for mergers andacquisitions Chemicals companies are performing strongly again asdemand recovers Now despite the still pending debt crisis anduncertainty regarding macroeconomic factors MampA activity levels arehigh as strategic buyers are well capitalized and aggressively searchingfor growth

This favorable earnings and cash situation allows players to usestrategically motivated MampA with the following goals

bull To further reshape their businesses and portfolio structure toward agrowth agenda

bull To acquire attractive targets before emerging players snap them up

bull To gain size compared to Asian and Middle East competitors in theirhome markets

The acquisition of Danisco by DuPont for $64 billion in 2011 was aldquoreshapingrdquo example According to DuPont Daniscorsquos assets t well with

the company and provide a number of growth opportunities especiallyin the energy and food sector Furthermore Daniscorsquos strong RampDportfolio and its specialty food ingredients business are seen as long-term growth drivers for DuPont The deal is in line with the companyrsquos

strategy to move beyond its classic chemicals focus toward the sectorsof alternative energy and agriculture that have been identied as rapidgrowth markets

Recent deals aiming at participation in emerging markets includeEastman Chemicalrsquos acquisition of Solutia for $47 billion mdash a big moveintended to expand Eastmanrsquos geographic footprint in emerging regionsLonzarsquos integration of Arch Chemicals is another example building up

Chemicals

companies are

performing

strongly again



11Strategyamp

the companyrsquos presence in China Brazil South Africa and India and

forming a world-leading company in microbial control

Though strategic investors are dominating the deal landscape nancialand institutional investors discovered the attractiveness of the chemicalssector during the last decade and are showing continued interest due inpart to favorable debt market conditions One of the largest deals in the

past few years was the acquisition of specialty chemicals companyLubrizol the worldrsquos largest producer of lubricant additives by BerkshireHathaway Warren Buettrsquos investment company for more than $9billion Exposure to emerging markets and economic recovery as well asthe companyrsquos proven pricing power made Lubrizol an attractiveinvestment Another sizable transaction was the acquisition of Tamincoby Apollo Global Management which bought the Belgian-based companyfrom CVC for $12 billion

Overall MampA activity is likely to continue at a high level during the

coming years especially as a strategy for transforming the business( see Exhibit 6)

Deal numberCompletedPending

2009200820072006200520042003200220012000 20122011 2013 YTD2010

Global chemicals deal volume and value 2000ndashQ1 2013

Numberof deals

Deal value(US$ in billions)

100

80

60

40

20

0

200

0

160

140

120

1000

800

600

400

2838

48

22

69

93

65

3846

31

85

146

97

65

Exhibit 6

After a post-crisis dip MampA activity has been rising

Note Only completed andpending deals capturedfor all industry groups(target acquirer seller) ona global basis no minimumdeal size

Source BloombergStrategyamp



12 Strategyamp

MampA as an instrument for competitive edge

Given the changing dynamics of the industry chemicals companies arefocusing on restructuring and realigning their business portfolios and

assets in order to stay competitive in an increasingly uncertain futureMampA in this context is a strategic means of shaping the business portfolioduring strategic transformation and avoiding the problems of

commoditization

Accordingly there are some common themes behind the moves ofchemicals players feedstock access absolute versus relative scaletransformationand accelerated growth and two-way geographicexpansion ( see Exhibit 7 )

Feedstock access

Western companies in particular are using MampA to improve their accessto feedstock in terms of both volume (by establishing a more secure

supply) and cost This is clearly the motivation behind the vast majority

Relevance of trend

De-risking

Exit volatile businesses

Oil amp gas Petrochemicals Base chemicalsSpecialty chemicals

customized

Fine chemicals

materials amp solutions

Transformation and accelerated growth

Acquire go-to-market capabilitiesindustry

amp customer access ldquobeyond chemicalsrdquo

Customized products

Add relevant capabilities

Relative scale

Achieve critical (minimum) size

Two-way geographic expansion

Established players enter new regions emerging players

expand to established markets

Feedstock access

Create competitive raw material position

Absolute scale

Global footprint with world-scale assets

DecreasingIncreasing

Unchanged

Exhibit 7

MampA themes and applicability along the chemicals value chain

Note Only completed and pending deals captured for all industry groups(target acquirer seller) on a global basis no minimum deal size

Source Bloomberg Strategyamp



13Strategyamp

of activities targeted at establishing a footprint in the Middle East

which oers signicant hydrocarbon feedstock advantages Beyond thepetrochemicals sector however the same logic of upstream integrationapplies to other strategic raw materials as well For example players likeDow Corning and ChinaChem are integrating backward in silicon metalor establishing positions in bio-based feedstock a promising new eld

Dow Chemical for instance studies bio-based ethylene and propyleneroutes to produce its key feedstock from renewable resources The rstcommercial priority is producing polyethylene from Brazilian ethanoland backward integration into sugarcane is seen as key to the projectDow believes that through integration this new feedstock will becompetitive with hydrocarbon-based feedstock To support this initiativethe company may consider acquisitions or partnerships

Absolute versus relative scale

The importance of scale for chemicals operations depends on thetargeted position along the value chain For large integrated playersscale will remain a primary focus Moving downstream in the valuechain additional criteria such as proximity to customers and industryinsights become more important for success This is especially true withcommodities like petrochemicals and base chemicals for which scale ofassets and operations is a decisive factor In some regions these industrysegments are still highly fragmented For example in Eastern Europemany petrochemicals players are still too small to eectively compete ontheir own which will likely make them potential targets for

consolidation A Hungarian producer of plastic raw materials andisocyanates BorsodChem was integrated into Wanhua Group to form

the third-largest isocyanate player in the world transforming tworegional players into a world-scale company

However the goal is not just scale in absolute terms but the appropriaterelative scale for a given market in order to achieve signicanceparticularly in downstream businesses New markets may require acritical mass to get into the game Examples include RampD capabilities forhighly innovative products in the nutrition area or customized products

for industrial applications In this realm success will come fromdetermining market needs and working backward to clearly dene theoptimum size to address current needs and leave the company positionedto compete and grow DSM for example completed a buyout of OceanNutrition in order to add omega-3 fatty acids to its portfolio This was oneof several acquisitions on DSMrsquos path to grow its nutrition segment which was declared to be a strategic growth platform in the corporate

strategy of 2010 Since then DSM has become one of the biggest namesin the human nutrition business

The goal is the

appropriate

scale for a

given market



14 Strategyamp


When Akzo Nobel announced its acquisition of ICI in 2007 it emphasizedthe transformational character of the deal which was to create a market-

leading position in decorative coatings The company exited pharma andfocused on coatings and chemicals and it wanted to form strong growthplatforms in both segments Furthermore geographic expansion and

product innovation were core topics on the strategic agenda The deal isan example of strategic MampA to strengthen the core business and drivethe transformation of the company allowing Akzo Nobel to participate ingrowth opportunities tap into new products and technologies andaccelerate its transformation

An even better example might be LG Chem The companyrsquos strategicimperative is to transform from a petrochemicals player to a globallyleading IT component provider On this path LG Chem relied heavily onacquisitions and also used strategic alliances and joint ventures such as

its arrangement with Philips Electronics to drive its transformation

The industry trend toward more market-facing and customer-centricbusiness activities implies a change of current business model for mostestablished players In fact changing the business model alone is notenough mdash these elds require a dierent skill set and altered capabilitiesMampA can be the means to enter new business elds in which companiesacquire not only assets technologies and a customer base but alsocritical capabilities and insights into alternative operating models In thiscontext the right target is determined not by its physical assets butbecause its capabilities are optimally complementary to the buyerrsquos

capabilities system Systematically buying the right skill set for customer-centric businesses will help a company attract new customers andpenetrate target markets



15Strategyamp


A signicant share of recent MampA deals have been aimed at increasing acompanyrsquos global footprint but despite these ambitions truly trans-

regional deals have been relatively scarce so far Typically Westerncompanies have sought to strengthen their portfolio by buying otherWestern companies with (slightly) better or complementary regional

footprints mdash an overly cautious MampA approach Despite this limitedprogress geographic expansion will continue to drive deals in the sectoras the regional scope broadens beyond home regions The theme willimpact both established and emerging players

For the rst group mdash established competitors mdash the demand shift towardemerging regions promises new growth opportunities However theMampA options are rather limited in at least some developing countriesespecially in Asia and the Middle East Potential targets are often part oflarge conglomerates or they are state-owned (fully or partially) making

them either unavailable or largely unattractive The government in somecountries like China poses an additional hurdle through restrictions on

the share of local companies that foreigners are allowed to own Theserules apply to most of the sectors that China deems strategically relevantto its economic progress mdash including chemicals Given such challengesitrsquos not surprising that there are limited sizable transactions in which aWestern player has taken over a Chinese competitor

On the other hand there is a good chance that ldquoreverserdquo takeovers willplay an increasing role in the future as new players from emergingcountries seek to establish a foothold in established Western markets and

open the gate for driving their export business PetroChinarsquos venture withIneos is in this category In Europe there is additional value in acquiringcompanies that are already in compliance with regulatory requirementssuch as the Reach standards currently being implemented

Similarly Sabic demonstrates the eorts of Middle East players to movebeyond their home turf of feedstock-related businesses and diversify with value-added downstream activities Founded in 1976 to process thenatural resources of Saudi Arabia mdash mainly natural gas and crude oil mdashSabic did not expand from that base until it acquired the petrochemicals

business of DSM in 2002 followed by the buyout of British HuntsmanPetrochemicals in 2006 Sabicrsquos acquisition of GE Plastics in 2007 can beseen as a starting point for diversifying its activities and moving moredownstream Given the huge capital resources and investment plans inthe region we expect further transactions from Sabic aimed ataccelerating its business transformation

There is a

good chance

that ldquoreverserdquo

takeovers

will play an

increasing role

in the future



16 Strategyamp

The rise of strategic alliances and partnerships

In addition to outright acquisitions partnerships and joint ventures arebecoming an increasingly important means for chemicals players to

reshape their activity portfolio especially in Asia and the Middle EastOne example is Sabic and Sinopecrsquos 2009 established joint venture SSTPCin Tianjin China valued at $27 billion with a capacity of 32 million tons

of chemicals including polyethylene ethylene glycol polypropylenebutadiene phenol and butene-1 The latest joint investment in thiscomplex is a polycarbonate plant costing $17 billion and expected to beoperational in 2015 with a capacity of 260000 tons per annum The venture will allow Sabic to supply polycarbonate as feedstock to its otherplants in China and the Pacic region and is seen in China as acornerstone of building up a state-level petrochemicals industry base

But Western players have also discovered the opportunity to participatein the demand growth via joint ventures with Chinese companies (such

as Eastman Chemical and Sinopec YPC for their hydrogenatedhydrocarbon resin plant in Nanjing) or to utilize feedstock advantages

from partnerships in the Middle East (such as Borouge formed byBorealis and Adnoc)

Such partnerships add value not only on the feedstock and upstreamside but also when companies move downstream and engage in thematerials and solution business The venture between Evonik andDaimler to develop next-generation lithium-ion batteries for electric vehicles is a good example As chemicals players typically donrsquot possessall the capabilities needed to execute downstream activities on their own

engaging with partners to complement the skill set makes sense Joint ventures and other forms of alliances are expected to further increase inthe coming years



17Strategyamp

The future chemicals landscape

As a result of this MampA activity the chemicals industry will see anevolution toward further segmentation along the value chain As the twoends of the value chain call for very dierent operating models andcapability sets each company will need to focus on a very specicsegment ( see Exhibit 8)


Oil amp gas PetrochemicalsBasechemicals

Specialtychemicals customized

Fine chemicals materials amp solutions

Straightenedsegmentation

Increasedtransformationof chemicalscompanies

Future

Industry structure amp driversin segment consolidationportfolio focus and

market orientation

Transformedspecialties

Specialtyholdings

Regional nicheplayers

Integrated players

- European focus- Portfolio manager

- Small to mediumsize

- Narrow focus

- Industry specialists- Focus on few largesegments

Upstream players

- Regional feedstockplayers (based inemerging countries)

- Backward integrated

- High integration level up to feedstock- Some new large players

Exhibit 8

The future chemicals landscape will require focusing on a specic segment of the value chain

Source Strategyamp



18 Strategyamp

These clusters can take various forms

bull Upstream players need to constantly assess their position in light ofthe rise of new companies with structural advantages Scalefeedstock access and cost are their main concerns so the pressure toconsolidate will persist as long as small nonintegrated assets are stillin the game

bull Integrated players will gain importance for the global chemicalslandscape In particular companies that are headquartered in theMiddle East China or India will emerge as new integrated majorsBut these players will face a growing challenge in managing divergingbusinesses with increasingly dierent key success factors mdash acommodity game on the one hand and a specialty business on theother mdash and with completely dierent market dynamics and businessmodel requirements Some integrated majors may opt to leave the

commodity game and move downstream to prot from less cyclical

and even less competitive specialty markets In any case thedevelopment of new capabilities will be key and MampA will be a majordeterminant of whether these moves succeed

bull Transformed specialty players that focus on a few selected segmentshave the potential to transform into highly market-oriented industryspecialists able to serve their respective customer industries withdedicated platforms unique technologies or customized solutionsTypically we expect those companies to be global champions in theirspecic niches These players will use MampA to integrate into adjacent value chains and segments mdash even moving beyond chemicals to

absorb additional capabilities as needed mdash and establish requiredactivities that arm them with the competencies to best serve their

target industry Examples of this trend are companies like Akzo Nobeland PPG which already put a strong emphasis on a selectedindustrymdashcoatingsmdashand take dedicated steps to enhance theirportfolios around that segment

bull Specialty holding companies will also take a very active approachtoward MampA and use transactions to constantly shape and developtheir portfolios Rockwood Holdings is an example mdash the company

has grown through acquisitions and expansion to its current portfolioof 10 individual business units serving diverse niche businessesSpecialty holding companies actively plan acquisitions anddivestitures to maintain a balanced and protable portfolio of marketsand technologies They are dierent from private equity playershowever in that they typically adopt a longer-term view aiming toleverage MampA to cross-fertilize businesses adding advanced

technology and innovation portfolios and maintaining leading-edgecapabilities in their specic elds

Specialty

holding

companies will

take a very

active approach

toward MampA



19Strategyamp

bull Another industry cluster regional niche players will continue to focus

on selected market segments or technologies where they will alwayshave a right to win as those markets are either too small or toounattractive for larger players These midsized players are likely totake a very selective approach to MampA Because they are technology-centered organic growth is their preferred development mode sothey will likely consider MampA only selectively in niche markets to

complement their technology portfolio

Beyond the variety of players regional dierences will also impact MampAas well as the integration of the targets For example it is likely thatcompanies in emerging markets that have been involved in recent deals will follow a similar life-cycle path when it comes to portfoliodevelopment After these companies have created sizable operations andbroadened the scope of their activities one can expect a consolidation wave a decade or so from now aimed at aligning portfolios and regaining

focus These companies will need to optimize the complex portfolios they

have built up over time triggering a new divestment wave and a newconsolidation cycle

Furthermore emerging players in Asia and the Middle East will likelyimplement ways of doing business and underlying commercialphilosophies that are not always compatible with Western practices Forexample cash-rich companies may not abide by investment rules and valuation methods used by established players Similarly managementmethods and corporate cultures might be hierarchical instead ofcooperative and information ows and decision making many not seemtransparent by Western standards An understanding of these dierences

will be especially crucial for successful integrations

It is critical not to underestimate the cultural aspects of management andintegration Ignoring dierent cultural backgrounds when bringingcompanies together puts the success of the deal at risk Even though thisalready applies to cross-border deals mdash such as those within Europe orbetween the European Union (EU) and the US mdash it has even greaterrelevance in deals involving more broadly disparate countries andcultures As a consequence capability building and integrationmanagement of the newly formed companies will prove a signicant

challenge for industry players engaging in cross-regional deals

Emerging

players will

likely implement

ways of doingbusiness that

are not always

compatible

with Western

practices



20 Strategyamp

The capabilities challenge

MampA is challenging throughout the entire life cycle developing a clearstrategic perspective on MampA smart target selection developing arationale for assessing the value proposition executing deals andintegrating new assets for sustainable success The same applies fordivestment cases

Given the current business environment chemicals players will have touse MampA as an integral part of their strategy to enable and accelerategrowth and retune their portfolios Accordingly these companies need to

build specic MampA capabilities along the complete life cycle of deals inorder to actively manage their portfolios

Segment-specifc MampA capability needs

As outlined above specic segments in the industry require dierent setsof core competencies This implies corresponding capabilities when it

comes to MampA as well Management at all companies throughout the value chain must consider the nature of business to be acquired potentialsynergy levers from dierent sources and the key success factors toensure a successful transaction However some segments will entailmore specic MampA capabilities

For upstream and base chemicals players MampA is mainly a means toachieve scale and build up favorable market positions This often requiresan ability to quickly apply the current business model to the target andleverage classic cost synergies during the post-merger integration phase

(PMI) Early identication and quantication of synergy targets is thestarting point and a disciplined approach to implementing them duringthe integration process is vital Companies need to eliminate costs quicklyby streamlining redundant processes while leveraging economies of scaleor operating cost advantages targeted by the merger

For specialty holding companies by contrast MampA is a constant themeand deals are more tactical As a result they need to ldquoindustrializerdquo therelated processes to build strong internal capabilities and a close link toexternal market sources These companies are typically looking for

Chemicals

players will have

to use MampA as

an integral part

of their strategy

to enable and

accelerate

growth



21Strategyamp

focused self-sucient and viable businesses that are adjacent to their

current positioning to complement their portfolio and a deepunderstanding of those businesses and dierentiating capabilities isrequired Maintaining or developing required capabilities and realizingMampA benets requires clear customer-centricity a commitment to salesand marketing excellence and cash generation (The synergies mainlyresult from top-line eects by combining dierent businesses within the

overall portfolio to create value)

Finally customer-centric companies or those that sell to a specicindustry need to focus on enhancing their capability set around theirchosen target segment As they strive to move further downstreamtoward materials and solutions businesses they can use MampA as aninstrument for selectively adding missing capabilities As these segmentsare typically innovation-driven targets need to add value through eitheraccess to existing technology or a strong RampD pipeline Also brand image

and customer access are highly valuable for this business model making

such features appealing in MampA targets This approach requires that duediligence processes take place through a capabilities lens and that thecompanies can smoothly integrate and leverage new capabilities

Capabilities-driven MampA strategy

Depending on the targetrsquos position in the value chain the capabilities andsuccess factors are dierent The more upstream a company sits themore assets scale and technologies are crucial Conversely the moredownstream a company is in the value chain the more innovation

customer-centricity sales and marketing and complexity managementbecome important

Thus chemicals players should follow a capabilities-driven MampAapproach that stringently focuses on the segment-specic success factors

Strategyamp research shows that the most successful MampA strategies arethose centering on building and leveraging capabilities1 In fact thesestrategies can create signicantly more value than comparabletransactions targeting diversication or size This observation tracks

logically as it is a natural follow-on from the idea that companies with adierentiating and winning set of capabilities are able to create more value than their peers For these companies MampA is simply an additionalmeans to develop this capability set For companies operating at dierentpositions along the chemicals value chain specic capabilities will have varying levels of relevance ( see Exhibit 9 next page)

Considering the relevance of the capabilities along the chemicals valuechain due diligence and post-merger integration need to be appliedusing a capabilities lens as well

Targets need

to add value

through access

to technology

or a strong

RampD pipeline



22 Strategyamp

Due diligence

In order to lay the foundation for a successful deal target selection anddue diligence need to go beyond the classic nance and legal scopeIndeed it is crucial to look at the dierentiating capabilities system of thepotential new entity Would the combined capability set give thecompany a competitive advantage or enhance the potential todierentiate itself in the long term Capabilities are not always as visibleas physical assets mdash and do not appear on the balance sheet Because ofthis it is important that potential deal partners apply concerted eorts toidentify key capabilities within the sta culture processes technologiesor systems during the due diligence phase

Integration challenges

Companies in the chemicals industry are nally understanding the role ofpost-merger integration in ensuring the success of a deal Still howeverPMI is where companies usually struggle most and where the risk ofdestroying value is highest Besides following PMI best practicescompanies can minimize this risk by designing an integration approachthat actively considers and maintains key capabilities PMI approaches will dier widely according to the characteristics of a deal mdash for exampleto respect regional and cultural dierences in cross-border transactionsor to account for divergent business styles arising from occupyingseparate positions along the value chain

This is true for deals in both directions Western players acquiring thosein emerging markets and vice versa Having local competencies availablein the target companyrsquos region is a prerequisite to integrating thecompanies but this set of competencies needs to include culturalcapabilities As most companies are unlikely to have these readilyavailable both sides must adopt a structured approach to building therelevant capabilities between their respective organizations

Physical assets

Relevance for MampA

Feedstock access

Brand

Process technology

Innovation

Product portfolio

Customer intimacy


Oil amp gas PetrochemicalsBase

chemicals

Specialty

chemicals

Fine

chemicals

Customer

industries

Exhibit 9

The relevance of capabilities across the value chain

Source Strategyamp



23Strategyamp

Consolidation has been mdash and will continue to be mdash a major theme forthe emerging markets as competitors in those regions mature Howeverit is not as much of a driving force in established regions whereconcentration will take place in industry segments that started to developduring the last decade As a result the industry landscape will be evenmore segmented in the future than it is today

Chemicals companies are constantly in quest of growth mdash in an industrythat oers ever-fewer and ever-smaller attractive growth segments Allmeasures taken by these companiesmdashshifting the business towarddownstream activities repositioning along the value chain enhancingthe regional footprint mdash must aim at capturing growth and enhancingtheir competitive advantage

These eorts are fueling sizable activities and MampA will continue to playa signicant role in the transformation of the chemicals landscape It isthe major means of quickly entering and occupying new market segments

and thus spurring growth in bursts rather than opting for organic growthin a given market

However to succeed in using MampA as a strategic instrument chemicalsplayers need to make it an integral part of their business strategy andfulll a range of prerequisites

bull Establish a standardized ldquoindustrializedrdquo MampA approach

bull Prepare to execute even more complex deals

bull Always apply a capabilities lens

bull Embrace cross-border mergers mdash and master cross-culturalintegration

Over the longer term having the right capability set available toexecute MampA in the chemicals industry will become the dierentiatingfactor for success

Conclusion



wwwstrategyandpwccom

Strategyamp is a global teamof practical strategistscommitted to helping youseize essential advantage

We do that by workingalongside you to solve yourtoughest problems andhelping you capture yourgreatest opportunities

These are complex andhigh-stakes undertakingsmdash often game-changingtransformations We bring100 years of strategyconsulting experienceand the unrivaled industryand functional capabilitiesof the PwC network to thetask Whether yoursquore

charting your corporatestrategy transforming afunction or business unit orbuilding critical capabilities wersquoll help you create the value yoursquore looking for with speed condenceand impact

We are a member of thePwC network of rms in157 countries with morethan 195000 peoplecommitted to deliveringquality in assurance taxand advisory services Tell us what matters to you and ndout more by visiting us atstrategyandpwccom




2 Strategyamp

Berlin

Matthias Baumlumler Partner+49-30-88705-852matthiasbaeumlerstrategyandpwccom

Chicago

Eduardo AlvarezSenior Partner+1-312-578-4774eduardoalvarezstrategyandpwccom

Dallas

John Corrigan Partner+1-214-746-6558

johncorriganstrategyandpwccom

DC

Peter Bertone

Senior Partner+1-703-682-5719peterbertonestrategyandpwccom

Dubai

Andrew Horncastle Partner+971-4-390-0260andrewhorncastlestrategyandpwccom

Dubai

David Branson Executive Advisor+971-4-390-0260davidbransonstrategyandpwccom

Duumlsseldorf

Joachim RoteringSenior Partner+49-211-3890-250

joachimroteringstrategyandpwccom

Sven Vallerien Partner+49-211-3890-260svenvallerienstrategyandpwccom

Frankfurt

Marcus Morawietz

Partner+49-69-97167-467

marcusmorawietzstrategyandpwccom

Hong Kong

Krishnan Narayanan

Senior Executive Advisor+852-3182-7192krishnannarayananstrategyandpwccom

Houston

Jayant Gotpagar Partner+1-713-650-4107

jayantgotpagarstrategyandpwccom

Juan Trebino Partner+1-713-650-4151

juantrebinostrategyandpwccom

London

Andrew Clark Partner+44-20-7393-3418andrewclark strategyandpwccom

New York

Richard Kaueld Partner+1-212-551-6582

richardkaueldstrategyandpwccom

Satildeo Paulo

Arthur Ramos

Partner+55-11-5501-6229arthurramosstrategyandpwccom

Dr Marcus Morawietz isa partner with Strategyampbased in FrankfurtHe focuses on growthstrategies business modeldesign innovation supplychain optimization andtransaction support for thechemicals industry

Iris Herrmann is aprincipal with Strategyampbased in Munich Shehas broad experience instrategy development and

implementation as wellas operations combined

with a perspectiveon organizationaltransformation andchange management

About the authorsContacts




3Strategyamp



Executive summary



4 Strategyamp




Hoechst


Basechemicals

Specialtychemicals

Finechemicals

Customerindustries

1990s


Invista (Koch)

Specialty

players

Basic chemicals

players Syngenta

Bayer CropScience

BASF

Sabic

Reliance

Emerging

players

High level of

integration

and value

chain

coverage

Diversified

landscape

due to

differentvalue

chain

coverage

Emergence

of newintegrated

players

Today


Companies

sought size amp

diversification

Companies

seek to

optimize

their portfolio

with a focuson core

competencies

Integrated

players

Arkema

IneosBP

Total

Oil amp gas

players

Total

Bayer

DuPont

ICI

BASF

Dow Chemical

DuPont

Lanxess


Sabic

Reliance

Akzo NobelICI

Exhibit 1


Source Strategyamp



5Strategyamp












Emerging

markets have

impacted MampA

strategies

recently



6 Strategyamp



Shell

LyondellBasell

Dow Chemical

Sinopec

BASF

ExxonMobil

Sabic

LG Chem

Akzo Nobel

BayerTotal

Evonik

Ineos

DuPont

Mitsubishi Chemical

Lyondell

Ineos

Reliance

Sinopec

Sabic

Akzo Nobel

Degussa

BP

Shell

ExxonMobil

Bayer

Total

BASF

DuPont

Dow Chemical

13

14

28

47

40

39

46

51

61

50

39

36

30

15

16

19

21

14

21

29

3

5

6

8

8

10

12

14

16

17

19

19

28

28

29

15

19

14

11

12

Trend

1000

15

10

0

5

1200 20

0

400

600

800

200

1106

18

82

88

2009

807

13

87

2008

1071

10

90

2007

1191

10

90

292

1034

2006

992

10

90

2005

830

13

87

2004

718

8

92

2003

659

8

92

2002

709

13

579

2001

581

1

99

20000

100

Number of deals

201212

16


84

2011 2013 YTD

1143

15

85

2010

87

Exhibit 2


Exhibit 3





Source Bloomberg




Number of deals



7Strategyamp







Region of acquirer

Region

of

target

Rest ofworld

75

Indiasubcontinent

86

GreaterChina

96

NE Asia

80

North America

72

Europe

84

Exhibit 4


Source Dealogic




8 Strategyamp














There are

few MampA

opportunities

in crop

protection left



9Strategyamp







1998


2011

~60

BASF

Dow

DuPont

BayerCropScience

Monsanto

Syngenta

18

Dow AgroSciences 18

Rohm amp Haas 04

Pioneer 14


BASF

DuPont 19

Bayer 20


AgrEvo 21

Zeneca 22

Monsanto 30

Novartis 39

Exhibit 5






10 Strategyamp











Chemicals

companies are

performing

strongly again



11Strategyamp








2009200820072006200520042003200220012000 20122011 2013 YTD2010


Numberof deals


100

80

60

40

20

0

200

0

160

140

120

1000

800

600

400

2838

48

22

69

93

65

3846

31

85

146

97

65

Exhibit 6






12 Strategyamp




commoditization


Feedstock access



Relevance of trend

De-risking



customized

Fine chemicals





Customized products


Relative scale





Feedstock access


Absolute scale



Unchanged

Exhibit 7






13Strategyamp











The goal is the

appropriate

scale for a

given market



14 Strategyamp











15Strategyamp












There is a

good chance


takeovers

will play an

increasing role

in the future



16 Strategyamp












17Strategyamp









Future


market orientation


Specialtyholdings


Integrated players



- Narrow focus


Upstream players




Exhibit 8


Source Strategyamp



18 Strategyamp












Specialty

holding

companies will

take a very

active approach

toward MampA



19Strategyamp











Emerging

players will

likely implement


are not always

compatible

with Western

practices



20 Strategyamp











Chemicals

players will have

to use MampA as

an integral part

of their strategy

to enable and

accelerate

growth



21Strategyamp














Targets need

to add value

through access

to technology

or a strong

RampD pipeline



22 Strategyamp

Due diligence





Physical assets

Relevance for MampA

Feedstock access

Brand

Process technology

Innovation

Product portfolio

Customer intimacy



chemicals

Specialty

chemicals

Fine

chemicals

Customer

industries

Exhibit 9


Source Strategyamp



23Strategyamp











Conclusion












3Strategyamp



Executive summary



4 Strategyamp




Hoechst


Basechemicals

Specialtychemicals

Finechemicals

Customerindustries

1990s


Invista (Koch)

Specialty

players

Basic chemicals

players Syngenta

Bayer CropScience

BASF

Sabic

Reliance

Emerging

players

High level of

integration

and value

chain

coverage

Diversified

landscape

due to

differentvalue

chain

coverage

Emergence

of newintegrated

players

Today


Companies

sought size amp

diversification

Companies

seek to

optimize

their portfolio

with a focuson core

competencies

Integrated

players

Arkema

IneosBP

Total

Oil amp gas

players

Total

Bayer

DuPont

ICI

BASF

Dow Chemical

DuPont

Lanxess


Sabic

Reliance

Akzo NobelICI

Exhibit 1


Source Strategyamp



5Strategyamp












Emerging

markets have

impacted MampA

strategies

recently



6 Strategyamp



Shell

LyondellBasell

Dow Chemical

Sinopec

BASF

ExxonMobil

Sabic

LG Chem

Akzo Nobel

BayerTotal

Evonik

Ineos

DuPont

Mitsubishi Chemical

Lyondell

Ineos

Reliance

Sinopec

Sabic

Akzo Nobel

Degussa

BP

Shell

ExxonMobil

Bayer

Total

BASF

DuPont

Dow Chemical

13

14

28

47

40

39

46

51

61

50

39

36

30

15

16

19

21

14

21

29

3

5

6

8

8

10

12

14

16

17

19

19

28

28

29

15

19

14

11

12

Trend

1000

15

10

0

5

1200 20

0

400

600

800

200

1106

18

82

88

2009

807

13

87

2008

1071

10

90

2007

1191

10

90

292

1034

2006

992

10

90

2005

830

13

87

2004

718

8

92

2003

659

8

92

2002

709

13

579

2001

581

1

99

20000

100

Number of deals

201212

16


84

2011 2013 YTD

1143

15

85

2010

87

Exhibit 2


Exhibit 3





Source Bloomberg




Number of deals



7Strategyamp







Region of acquirer

Region

of

target

Rest ofworld

75

Indiasubcontinent

86

GreaterChina

96

NE Asia

80

North America

72

Europe

84

Exhibit 4


Source Dealogic




8 Strategyamp














There are

few MampA

opportunities

in crop

protection left



9Strategyamp







1998


2011

~60

BASF

Dow

DuPont

BayerCropScience

Monsanto

Syngenta

18

Dow AgroSciences 18

Rohm amp Haas 04

Pioneer 14


BASF

DuPont 19

Bayer 20


AgrEvo 21

Zeneca 22

Monsanto 30

Novartis 39

Exhibit 5






10 Strategyamp











Chemicals

companies are

performing

strongly again



11Strategyamp








2009200820072006200520042003200220012000 20122011 2013 YTD2010


Numberof deals


100

80

60

40

20

0

200

0

160

140

120

1000

800

600

400

2838

48

22

69

93

65

3846

31

85

146

97

65

Exhibit 6






12 Strategyamp




commoditization


Feedstock access



Relevance of trend

De-risking



customized

Fine chemicals





Customized products


Relative scale





Feedstock access


Absolute scale



Unchanged

Exhibit 7






13Strategyamp











The goal is the

appropriate

scale for a

given market



14 Strategyamp











15Strategyamp












There is a

good chance


takeovers

will play an

increasing role

in the future



16 Strategyamp












17Strategyamp









Future


market orientation


Specialtyholdings


Integrated players



- Narrow focus


Upstream players




Exhibit 8


Source Strategyamp



18 Strategyamp












Specialty

holding

companies will

take a very

active approach

toward MampA



19Strategyamp











Emerging

players will

likely implement


are not always

compatible

with Western

practices



20 Strategyamp











Chemicals

players will have

to use MampA as

an integral part

of their strategy

to enable and

accelerate

growth



21Strategyamp














Targets need

to add value

through access

to technology

or a strong

RampD pipeline



22 Strategyamp

Due diligence





Physical assets

Relevance for MampA

Feedstock access

Brand

Process technology

Innovation

Product portfolio

Customer intimacy



chemicals

Specialty

chemicals

Fine

chemicals

Customer

industries

Exhibit 9


Source Strategyamp



23Strategyamp











Conclusion












4 Strategyamp




Hoechst


Basechemicals

Specialtychemicals

Finechemicals

Customerindustries

1990s


Invista (Koch)

Specialty

players

Basic chemicals

players Syngenta

Bayer CropScience

BASF

Sabic

Reliance

Emerging

players

High level of

integration

and value

chain

coverage

Diversified

landscape

due to

differentvalue

chain

coverage

Emergence

of newintegrated

players

Today


Companies

sought size amp

diversification

Companies

seek to

optimize

their portfolio

with a focuson core

competencies

Integrated

players

Arkema

IneosBP

Total

Oil amp gas

players

Total

Bayer

DuPont

ICI

BASF

Dow Chemical

DuPont

Lanxess


Sabic

Reliance

Akzo NobelICI

Exhibit 1


Source Strategyamp



5Strategyamp












Emerging

markets have

impacted MampA

strategies

recently



6 Strategyamp



Shell

LyondellBasell

Dow Chemical

Sinopec

BASF

ExxonMobil

Sabic

LG Chem

Akzo Nobel

BayerTotal

Evonik

Ineos

DuPont

Mitsubishi Chemical

Lyondell

Ineos

Reliance

Sinopec

Sabic

Akzo Nobel

Degussa

BP

Shell

ExxonMobil

Bayer

Total

BASF

DuPont

Dow Chemical

13

14

28

47

40

39

46

51

61

50

39

36

30

15

16

19

21

14

21

29

3

5

6

8

8

10

12

14

16

17

19

19

28

28

29

15

19

14

11

12

Trend

1000

15

10

0

5

1200 20

0

400

600

800

200

1106

18

82

88

2009

807

13

87

2008

1071

10

90

2007

1191

10

90

292

1034

2006

992

10

90

2005

830

13

87

2004

718

8

92

2003

659

8

92

2002

709

13

579

2001

581

1

99

20000

100

Number of deals

201212

16


84

2011 2013 YTD

1143

15

85

2010

87

Exhibit 2


Exhibit 3





Source Bloomberg




Number of deals



7Strategyamp







Region of acquirer

Region

of

target

Rest ofworld

75

Indiasubcontinent

86

GreaterChina

96

NE Asia

80

North America

72

Europe

84

Exhibit 4


Source Dealogic




8 Strategyamp














There are

few MampA

opportunities

in crop

protection left



9Strategyamp







1998


2011

~60

BASF

Dow

DuPont

BayerCropScience

Monsanto

Syngenta

18

Dow AgroSciences 18

Rohm amp Haas 04

Pioneer 14


BASF

DuPont 19

Bayer 20


AgrEvo 21

Zeneca 22

Monsanto 30

Novartis 39

Exhibit 5






10 Strategyamp











Chemicals

companies are

performing

strongly again



11Strategyamp








2009200820072006200520042003200220012000 20122011 2013 YTD2010


Numberof deals


100

80

60

40

20

0

200

0

160

140

120

1000

800

600

400

2838

48

22

69

93

65

3846

31

85

146

97

65

Exhibit 6






12 Strategyamp




commoditization


Feedstock access



Relevance of trend

De-risking



customized

Fine chemicals





Customized products


Relative scale





Feedstock access


Absolute scale



Unchanged

Exhibit 7






13Strategyamp











The goal is the

appropriate

scale for a

given market



14 Strategyamp











15Strategyamp












There is a

good chance


takeovers

will play an

increasing role

in the future



16 Strategyamp












17Strategyamp









Future


market orientation


Specialtyholdings


Integrated players



- Narrow focus


Upstream players




Exhibit 8


Source Strategyamp



18 Strategyamp












Specialty

holding

companies will

take a very

active approach

toward MampA



19Strategyamp











Emerging

players will

likely implement


are not always

compatible

with Western

practices



20 Strategyamp











Chemicals

players will have

to use MampA as

an integral part

of their strategy

to enable and

accelerate

growth



21Strategyamp














Targets need

to add value

through access

to technology

or a strong

RampD pipeline



22 Strategyamp

Due diligence





Physical assets

Relevance for MampA

Feedstock access

Brand

Process technology

Innovation

Product portfolio

Customer intimacy



chemicals

Specialty

chemicals

Fine

chemicals

Customer

industries

Exhibit 9


Source Strategyamp



23Strategyamp











Conclusion












5Strategyamp












Emerging

markets have

impacted MampA

strategies

recently



6 Strategyamp



Shell

LyondellBasell

Dow Chemical

Sinopec

BASF

ExxonMobil

Sabic

LG Chem

Akzo Nobel

BayerTotal

Evonik

Ineos

DuPont

Mitsubishi Chemical

Lyondell

Ineos

Reliance

Sinopec

Sabic

Akzo Nobel

Degussa

BP

Shell

ExxonMobil

Bayer

Total

BASF

DuPont

Dow Chemical

13

14

28

47

40

39

46

51

61

50

39

36

30

15

16

19

21

14

21

29

3

5

6

8

8

10

12

14

16

17

19

19

28

28

29

15

19

14

11

12

Trend

1000

15

10

0

5

1200 20

0

400

600

800

200

1106

18

82

88

2009

807

13

87

2008

1071

10

90

2007

1191

10

90

292

1034

2006

992

10

90

2005

830

13

87

2004

718

8

92

2003

659

8

92

2002

709

13

579

2001

581

1

99

20000

100

Number of deals

201212

16


84

2011 2013 YTD

1143

15

85

2010

87

Exhibit 2


Exhibit 3





Source Bloomberg




Number of deals



7Strategyamp







Region of acquirer

Region

of

target

Rest ofworld

75

Indiasubcontinent

86

GreaterChina

96

NE Asia

80

North America

72

Europe

84

Exhibit 4


Source Dealogic




8 Strategyamp














There are

few MampA

opportunities

in crop

protection left



9Strategyamp







1998


2011

~60

BASF

Dow

DuPont

BayerCropScience

Monsanto

Syngenta

18

Dow AgroSciences 18

Rohm amp Haas 04

Pioneer 14


BASF

DuPont 19

Bayer 20


AgrEvo 21

Zeneca 22

Monsanto 30

Novartis 39

Exhibit 5






10 Strategyamp











Chemicals

companies are

performing

strongly again



11Strategyamp








2009200820072006200520042003200220012000 20122011 2013 YTD2010


Numberof deals


100

80

60

40

20

0

200

0

160

140

120

1000

800

600

400

2838

48

22

69

93

65

3846

31

85

146

97

65

Exhibit 6






12 Strategyamp




commoditization


Feedstock access



Relevance of trend

De-risking



customized

Fine chemicals





Customized products


Relative scale





Feedstock access


Absolute scale



Unchanged

Exhibit 7






13Strategyamp











The goal is the

appropriate

scale for a

given market



14 Strategyamp











15Strategyamp












There is a

good chance


takeovers

will play an

increasing role

in the future



16 Strategyamp












17Strategyamp









Future


market orientation


Specialtyholdings


Integrated players



- Narrow focus


Upstream players




Exhibit 8


Source Strategyamp



18 Strategyamp












Specialty

holding

companies will

take a very

active approach

toward MampA



19Strategyamp











Emerging

players will

likely implement


are not always

compatible

with Western

practices



20 Strategyamp











Chemicals

players will have

to use MampA as

an integral part

of their strategy

to enable and

accelerate

growth



21Strategyamp














Targets need

to add value

through access

to technology

or a strong

RampD pipeline



22 Strategyamp

Due diligence





Physical assets

Relevance for MampA

Feedstock access

Brand

Process technology

Innovation

Product portfolio

Customer intimacy



chemicals

Specialty

chemicals

Fine

chemicals

Customer

industries

Exhibit 9


Source Strategyamp



23Strategyamp











Conclusion












6 Strategyamp



Shell

LyondellBasell

Dow Chemical

Sinopec

BASF

ExxonMobil

Sabic

LG Chem

Akzo Nobel

BayerTotal

Evonik

Ineos

DuPont

Mitsubishi Chemical

Lyondell

Ineos

Reliance

Sinopec

Sabic

Akzo Nobel

Degussa

BP

Shell

ExxonMobil

Bayer

Total

BASF

DuPont

Dow Chemical

13

14

28

47

40

39

46

51

61

50

39

36

30

15

16

19

21

14

21

29

3

5

6

8

8

10

12

14

16

17

19

19

28

28

29

15

19

14

11

12

Trend

1000

15

10

0

5

1200 20

0

400

600

800

200

1106

18

82

88

2009

807

13

87

2008

1071

10

90

2007

1191

10

90

292

1034

2006

992

10

90

2005

830

13

87

2004

718

8

92

2003

659

8

92

2002

709

13

579

2001

581

1

99

20000

100

Number of deals

201212

16


84

2011 2013 YTD

1143

15

85

2010

87

Exhibit 2


Exhibit 3





Source Bloomberg




Number of deals



7Strategyamp







Region of acquirer

Region

of

target

Rest ofworld

75

Indiasubcontinent

86

GreaterChina

96

NE Asia

80

North America

72

Europe

84

Exhibit 4


Source Dealogic




8 Strategyamp














There are

few MampA

opportunities

in crop

protection left



9Strategyamp







1998


2011

~60

BASF

Dow

DuPont

BayerCropScience

Monsanto

Syngenta

18

Dow AgroSciences 18

Rohm amp Haas 04

Pioneer 14


BASF

DuPont 19

Bayer 20


AgrEvo 21

Zeneca 22

Monsanto 30

Novartis 39

Exhibit 5






10 Strategyamp











Chemicals

companies are

performing

strongly again



11Strategyamp








2009200820072006200520042003200220012000 20122011 2013 YTD2010


Numberof deals


100

80

60

40

20

0

200

0

160

140

120

1000

800

600

400

2838

48

22

69

93

65

3846

31

85

146

97

65

Exhibit 6






12 Strategyamp




commoditization


Feedstock access



Relevance of trend

De-risking



customized

Fine chemicals





Customized products


Relative scale





Feedstock access


Absolute scale



Unchanged

Exhibit 7






13Strategyamp











The goal is the

appropriate

scale for a

given market



14 Strategyamp











15Strategyamp












There is a

good chance


takeovers

will play an

increasing role

in the future



16 Strategyamp












17Strategyamp









Future


market orientation


Specialtyholdings


Integrated players



- Narrow focus


Upstream players




Exhibit 8


Source Strategyamp



18 Strategyamp












Specialty

holding

companies will

take a very

active approach

toward MampA



19Strategyamp











Emerging

players will

likely implement


are not always

compatible

with Western

practices



20 Strategyamp











Chemicals

players will have

to use MampA as

an integral part

of their strategy

to enable and

accelerate

growth



21Strategyamp














Targets need

to add value

through access

to technology

or a strong

RampD pipeline



22 Strategyamp

Due diligence





Physical assets

Relevance for MampA

Feedstock access

Brand

Process technology

Innovation

Product portfolio

Customer intimacy



chemicals

Specialty

chemicals

Fine

chemicals

Customer

industries

Exhibit 9


Source Strategyamp



23Strategyamp











Conclusion












7Strategyamp







Region of acquirer

Region

of

target

Rest ofworld

75

Indiasubcontinent

86

GreaterChina

96

NE Asia

80

North America

72

Europe

84

Exhibit 4


Source Dealogic




8 Strategyamp














There are

few MampA

opportunities

in crop

protection left



9Strategyamp







1998


2011

~60

BASF

Dow

DuPont

BayerCropScience

Monsanto

Syngenta

18

Dow AgroSciences 18

Rohm amp Haas 04

Pioneer 14


BASF

DuPont 19

Bayer 20


AgrEvo 21

Zeneca 22

Monsanto 30

Novartis 39

Exhibit 5






10 Strategyamp











Chemicals

companies are

performing

strongly again



11Strategyamp








2009200820072006200520042003200220012000 20122011 2013 YTD2010


Numberof deals


100

80

60

40

20

0

200

0

160

140

120

1000

800

600

400

2838

48

22

69

93

65

3846

31

85

146

97

65

Exhibit 6






12 Strategyamp




commoditization


Feedstock access



Relevance of trend

De-risking



customized

Fine chemicals





Customized products


Relative scale





Feedstock access


Absolute scale



Unchanged

Exhibit 7






13Strategyamp











The goal is the

appropriate

scale for a

given market



14 Strategyamp











15Strategyamp












There is a

good chance


takeovers

will play an

increasing role

in the future



16 Strategyamp












17Strategyamp









Future


market orientation


Specialtyholdings


Integrated players



- Narrow focus


Upstream players




Exhibit 8


Source Strategyamp



18 Strategyamp












Specialty

holding

companies will

take a very

active approach

toward MampA



19Strategyamp











Emerging

players will

likely implement


are not always

compatible

with Western

practices



20 Strategyamp











Chemicals

players will have

to use MampA as

an integral part

of their strategy

to enable and

accelerate

growth



21Strategyamp














Targets need

to add value

through access

to technology

or a strong

RampD pipeline



22 Strategyamp

Due diligence





Physical assets

Relevance for MampA

Feedstock access

Brand

Process technology

Innovation

Product portfolio

Customer intimacy



chemicals

Specialty

chemicals

Fine

chemicals

Customer

industries

Exhibit 9


Source Strategyamp



23Strategyamp











Conclusion












8 Strategyamp














There are

few MampA

opportunities

in crop

protection left



9Strategyamp







1998


2011

~60

BASF

Dow

DuPont

BayerCropScience

Monsanto

Syngenta

18

Dow AgroSciences 18

Rohm amp Haas 04

Pioneer 14


BASF

DuPont 19

Bayer 20


AgrEvo 21

Zeneca 22

Monsanto 30

Novartis 39

Exhibit 5






10 Strategyamp











Chemicals

companies are

performing

strongly again



11Strategyamp








2009200820072006200520042003200220012000 20122011 2013 YTD2010


Numberof deals


100

80

60

40

20

0

200

0

160

140

120

1000

800

600

400

2838

48

22

69

93

65

3846

31

85

146

97

65

Exhibit 6






12 Strategyamp




commoditization


Feedstock access



Relevance of trend

De-risking



customized

Fine chemicals





Customized products


Relative scale





Feedstock access


Absolute scale



Unchanged

Exhibit 7






13Strategyamp











The goal is the

appropriate

scale for a

given market



14 Strategyamp











15Strategyamp












There is a

good chance


takeovers

will play an

increasing role

in the future



16 Strategyamp












17Strategyamp









Future


market orientation


Specialtyholdings


Integrated players



- Narrow focus


Upstream players




Exhibit 8


Source Strategyamp



18 Strategyamp












Specialty

holding

companies will

take a very

active approach

toward MampA



19Strategyamp











Emerging

players will

likely implement


are not always

compatible

with Western

practices



20 Strategyamp











Chemicals

players will have

to use MampA as

an integral part

of their strategy

to enable and

accelerate

growth



21Strategyamp














Targets need

to add value

through access

to technology

or a strong

RampD pipeline



22 Strategyamp

Due diligence





Physical assets

Relevance for MampA

Feedstock access

Brand

Process technology

Innovation

Product portfolio

Customer intimacy



chemicals

Specialty

chemicals

Fine

chemicals

Customer

industries

Exhibit 9


Source Strategyamp



23Strategyamp











Conclusion












9Strategyamp







1998


2011

~60

BASF

Dow

DuPont

BayerCropScience

Monsanto

Syngenta

18

Dow AgroSciences 18

Rohm amp Haas 04

Pioneer 14


BASF

DuPont 19

Bayer 20


AgrEvo 21

Zeneca 22

Monsanto 30

Novartis 39

Exhibit 5






10 Strategyamp











Chemicals

companies are

performing

strongly again



11Strategyamp








2009200820072006200520042003200220012000 20122011 2013 YTD2010


Numberof deals


100

80

60

40

20

0

200

0

160

140

120

1000

800

600

400

2838

48

22

69

93

65

3846

31

85

146

97

65

Exhibit 6






12 Strategyamp




commoditization


Feedstock access



Relevance of trend

De-risking



customized

Fine chemicals





Customized products


Relative scale





Feedstock access


Absolute scale



Unchanged

Exhibit 7






13Strategyamp











The goal is the

appropriate

scale for a

given market



14 Strategyamp











15Strategyamp












There is a

good chance


takeovers

will play an

increasing role

in the future



16 Strategyamp












17Strategyamp









Future


market orientation


Specialtyholdings


Integrated players



- Narrow focus


Upstream players




Exhibit 8


Source Strategyamp



18 Strategyamp












Specialty

holding

companies will

take a very

active approach

toward MampA



19Strategyamp











Emerging

players will

likely implement


are not always

compatible

with Western

practices



20 Strategyamp











Chemicals

players will have

to use MampA as

an integral part

of their strategy

to enable and

accelerate

growth



21Strategyamp














Targets need

to add value

through access

to technology

or a strong

RampD pipeline



22 Strategyamp

Due diligence





Physical assets

Relevance for MampA

Feedstock access

Brand

Process technology

Innovation

Product portfolio

Customer intimacy



chemicals

Specialty

chemicals

Fine

chemicals

Customer

industries

Exhibit 9


Source Strategyamp



23Strategyamp











Conclusion












10 Strategyamp











Chemicals

companies are

performing

strongly again



11Strategyamp








2009200820072006200520042003200220012000 20122011 2013 YTD2010


Numberof deals


100

80

60

40

20

0

200

0

160

140

120

1000

800

600

400

2838

48

22

69

93

65

3846

31

85

146

97

65

Exhibit 6






12 Strategyamp




commoditization


Feedstock access



Relevance of trend

De-risking



customized

Fine chemicals





Customized products


Relative scale





Feedstock access


Absolute scale



Unchanged

Exhibit 7






13Strategyamp











The goal is the

appropriate

scale for a

given market



14 Strategyamp











15Strategyamp












There is a

good chance


takeovers

will play an

increasing role

in the future



16 Strategyamp












17Strategyamp









Future


market orientation


Specialtyholdings


Integrated players



- Narrow focus


Upstream players




Exhibit 8


Source Strategyamp



18 Strategyamp












Specialty

holding

companies will

take a very

active approach

toward MampA



19Strategyamp











Emerging

players will

likely implement


are not always

compatible

with Western

practices



20 Strategyamp











Chemicals

players will have

to use MampA as

an integral part

of their strategy

to enable and

accelerate

growth



21Strategyamp














Targets need

to add value

through access

to technology

or a strong

RampD pipeline



22 Strategyamp

Due diligence





Physical assets

Relevance for MampA

Feedstock access

Brand

Process technology

Innovation

Product portfolio

Customer intimacy



chemicals

Specialty

chemicals

Fine

chemicals

Customer

industries

Exhibit 9


Source Strategyamp



23Strategyamp











Conclusion












11Strategyamp








2009200820072006200520042003200220012000 20122011 2013 YTD2010


Numberof deals


100

80

60

40

20

0

200

0

160

140

120

1000

800

600

400

2838

48

22

69

93

65

3846

31

85

146

97

65

Exhibit 6






12 Strategyamp




commoditization


Feedstock access



Relevance of trend

De-risking



customized

Fine chemicals





Customized products


Relative scale





Feedstock access


Absolute scale



Unchanged

Exhibit 7






13Strategyamp











The goal is the

appropriate

scale for a

given market



14 Strategyamp











15Strategyamp












There is a

good chance


takeovers

will play an

increasing role

in the future



16 Strategyamp












17Strategyamp









Future


market orientation


Specialtyholdings


Integrated players



- Narrow focus


Upstream players




Exhibit 8


Source Strategyamp



18 Strategyamp












Specialty

holding

companies will

take a very

active approach

toward MampA



19Strategyamp











Emerging

players will

likely implement


are not always

compatible

with Western

practices



20 Strategyamp











Chemicals

players will have

to use MampA as

an integral part

of their strategy

to enable and

accelerate

growth



21Strategyamp














Targets need

to add value

through access

to technology

or a strong

RampD pipeline



22 Strategyamp

Due diligence





Physical assets

Relevance for MampA

Feedstock access

Brand

Process technology

Innovation

Product portfolio

Customer intimacy



chemicals

Specialty

chemicals

Fine

chemicals

Customer

industries

Exhibit 9


Source Strategyamp



23Strategyamp











Conclusion












12 Strategyamp




commoditization


Feedstock access



Relevance of trend

De-risking



customized

Fine chemicals





Customized products


Relative scale





Feedstock access


Absolute scale



Unchanged

Exhibit 7






13Strategyamp











The goal is the

appropriate

scale for a

given market



14 Strategyamp











15Strategyamp












There is a

good chance


takeovers

will play an

increasing role

in the future



16 Strategyamp












17Strategyamp









Future


market orientation


Specialtyholdings


Integrated players



- Narrow focus


Upstream players




Exhibit 8


Source Strategyamp



18 Strategyamp












Specialty

holding

companies will

take a very

active approach

toward MampA



19Strategyamp











Emerging

players will

likely implement


are not always

compatible

with Western

practices



20 Strategyamp











Chemicals

players will have

to use MampA as

an integral part

of their strategy

to enable and

accelerate

growth



21Strategyamp














Targets need

to add value

through access

to technology

or a strong

RampD pipeline



22 Strategyamp

Due diligence





Physical assets

Relevance for MampA

Feedstock access

Brand

Process technology

Innovation

Product portfolio

Customer intimacy



chemicals

Specialty

chemicals

Fine

chemicals

Customer

industries

Exhibit 9


Source Strategyamp



23Strategyamp











Conclusion












13Strategyamp











The goal is the

appropriate

scale for a

given market



14 Strategyamp











15Strategyamp












There is a

good chance


takeovers

will play an

increasing role

in the future



16 Strategyamp












17Strategyamp









Future


market orientation


Specialtyholdings


Integrated players



- Narrow focus


Upstream players




Exhibit 8


Source Strategyamp



18 Strategyamp












Specialty

holding

companies will

take a very

active approach

toward MampA



19Strategyamp











Emerging

players will

likely implement


are not always

compatible

with Western

practices



20 Strategyamp











Chemicals

players will have

to use MampA as

an integral part

of their strategy

to enable and

accelerate

growth



21Strategyamp














Targets need

to add value

through access

to technology

or a strong

RampD pipeline



22 Strategyamp

Due diligence





Physical assets

Relevance for MampA

Feedstock access

Brand

Process technology

Innovation

Product portfolio

Customer intimacy



chemicals

Specialty

chemicals

Fine

chemicals

Customer

industries

Exhibit 9


Source Strategyamp



23Strategyamp











Conclusion












14 Strategyamp











15Strategyamp












There is a

good chance


takeovers

will play an

increasing role

in the future



16 Strategyamp












17Strategyamp









Future


market orientation


Specialtyholdings


Integrated players



- Narrow focus


Upstream players




Exhibit 8


Source Strategyamp



18 Strategyamp












Specialty

holding

companies will

take a very

active approach

toward MampA



19Strategyamp











Emerging

players will

likely implement


are not always

compatible

with Western

practices



20 Strategyamp











Chemicals

players will have

to use MampA as

an integral part

of their strategy

to enable and

accelerate

growth



21Strategyamp














Targets need

to add value

through access

to technology

or a strong

RampD pipeline



22 Strategyamp

Due diligence





Physical assets

Relevance for MampA

Feedstock access

Brand

Process technology

Innovation

Product portfolio

Customer intimacy



chemicals

Specialty

chemicals

Fine

chemicals

Customer

industries

Exhibit 9


Source Strategyamp



23Strategyamp











Conclusion












15Strategyamp












There is a

good chance


takeovers

will play an

increasing role

in the future



16 Strategyamp












17Strategyamp









Future


market orientation


Specialtyholdings


Integrated players



- Narrow focus


Upstream players




Exhibit 8


Source Strategyamp



18 Strategyamp












Specialty

holding

companies will

take a very

active approach

toward MampA



19Strategyamp











Emerging

players will

likely implement


are not always

compatible

with Western

practices



20 Strategyamp











Chemicals

players will have

to use MampA as

an integral part

of their strategy

to enable and

accelerate

growth



21Strategyamp














Targets need

to add value

through access

to technology

or a strong

RampD pipeline



22 Strategyamp

Due diligence





Physical assets

Relevance for MampA

Feedstock access

Brand

Process technology

Innovation

Product portfolio

Customer intimacy



chemicals

Specialty

chemicals

Fine

chemicals

Customer

industries

Exhibit 9


Source Strategyamp



23Strategyamp











Conclusion












16 Strategyamp












17Strategyamp









Future


market orientation


Specialtyholdings


Integrated players



- Narrow focus


Upstream players




Exhibit 8


Source Strategyamp



18 Strategyamp












Specialty

holding

companies will

take a very

active approach

toward MampA



19Strategyamp











Emerging

players will

likely implement


are not always

compatible

with Western

practices



20 Strategyamp











Chemicals

players will have

to use MampA as

an integral part

of their strategy

to enable and

accelerate

growth



21Strategyamp














Targets need

to add value

through access

to technology

or a strong

RampD pipeline



22 Strategyamp

Due diligence





Physical assets

Relevance for MampA

Feedstock access

Brand

Process technology

Innovation

Product portfolio

Customer intimacy



chemicals

Specialty

chemicals

Fine

chemicals

Customer

industries

Exhibit 9


Source Strategyamp



23Strategyamp











Conclusion












17Strategyamp









Future


market orientation


Specialtyholdings


Integrated players



- Narrow focus


Upstream players




Exhibit 8


Source Strategyamp



18 Strategyamp












Specialty

holding

companies will

take a very

active approach

toward MampA



19Strategyamp











Emerging

players will

likely implement


are not always

compatible

with Western

practices



20 Strategyamp











Chemicals

players will have

to use MampA as

an integral part

of their strategy

to enable and

accelerate

growth



21Strategyamp














Targets need

to add value

through access

to technology

or a strong

RampD pipeline



22 Strategyamp

Due diligence





Physical assets

Relevance for MampA

Feedstock access

Brand

Process technology

Innovation

Product portfolio

Customer intimacy



chemicals

Specialty

chemicals

Fine

chemicals

Customer

industries

Exhibit 9


Source Strategyamp



23Strategyamp











Conclusion












18 Strategyamp












Specialty

holding

companies will

take a very

active approach

toward MampA



19Strategyamp











Emerging

players will

likely implement


are not always

compatible

with Western

practices



20 Strategyamp











Chemicals

players will have

to use MampA as

an integral part

of their strategy

to enable and

accelerate

growth



21Strategyamp














Targets need

to add value

through access

to technology

or a strong

RampD pipeline



22 Strategyamp

Due diligence





Physical assets

Relevance for MampA

Feedstock access

Brand

Process technology

Innovation

Product portfolio

Customer intimacy



chemicals

Specialty

chemicals

Fine

chemicals

Customer

industries

Exhibit 9


Source Strategyamp



23Strategyamp











Conclusion












19Strategyamp











Emerging

players will

likely implement


are not always

compatible

with Western

practices



20 Strategyamp











Chemicals

players will have

to use MampA as

an integral part

of their strategy

to enable and

accelerate

growth



21Strategyamp














Targets need

to add value

through access

to technology

or a strong

RampD pipeline



22 Strategyamp

Due diligence





Physical assets

Relevance for MampA

Feedstock access

Brand

Process technology

Innovation

Product portfolio

Customer intimacy



chemicals

Specialty

chemicals

Fine

chemicals

Customer

industries

Exhibit 9


Source Strategyamp



23Strategyamp











Conclusion












20 Strategyamp











Chemicals

players will have

to use MampA as

an integral part

of their strategy

to enable and

accelerate

growth



21Strategyamp














Targets need

to add value

through access

to technology

or a strong

RampD pipeline



22 Strategyamp

Due diligence





Physical assets

Relevance for MampA

Feedstock access

Brand

Process technology

Innovation

Product portfolio

Customer intimacy



chemicals

Specialty

chemicals

Fine

chemicals

Customer

industries

Exhibit 9


Source Strategyamp



23Strategyamp











Conclusion












21Strategyamp














Targets need

to add value

through access

to technology

or a strong

RampD pipeline



22 Strategyamp

Due diligence





Physical assets

Relevance for MampA

Feedstock access

Brand

Process technology

Innovation

Product portfolio

Customer intimacy



chemicals

Specialty

chemicals

Fine

chemicals

Customer

industries

Exhibit 9


Source Strategyamp



23Strategyamp











Conclusion












22 Strategyamp

Due diligence





Physical assets

Relevance for MampA

Feedstock access

Brand

Process technology

Innovation

Product portfolio

Customer intimacy



chemicals

Specialty

chemicals

Fine

chemicals

Customer

industries

Exhibit 9


Source Strategyamp



23Strategyamp











Conclusion












23Strategyamp











Conclusion










future of chemicals ix

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