Reliance Bid For LyondellBasell To Kick-Start M&A Activity

Now that both Reliance Industries and LyondellBasell have confirmed that an offer has been made for the world's 4th largest chemical company, we can anticipate a significant increase in M&A activity in the chemical industry.

Some industry analysts believe that the reported price, of somewhere between $10M - $12M, is relatively low, given LyondellBasell's recently published EBITDA results and could initiate a bidding war involving a number of prospective suitors.

The news follows hot on the heels of the various reports that IPIC is in talks with as many as 5 potential targets, including Bayer MaterialScience and other companies possessing technologies technologies which would support the development of the ChemaWEyaat project in Abu Dhabi.

There have also been reports that Dow Chemical has been in talks regarding the sale of a number of assets, as well as reports that Sinopec was looking at a number of potential targets in Europe. I've also heard several suggestions that a number of the Middle East majors will be looking to complete further acquisitions in 2010.

It looks certain that 2010 will be a major year of change in the sector, with the emergence of some new superpowers in the industry and further consequent changes to the asset footprint. Time for the site people to start changing the signposts and the letterheads once again!