BASF SE, Bayer AG and Royal DSM NV have performed better in 2009 proven by stronger balance sheets and management efforts to sharpen focus. These companies are likely to be most active in mergers and acquisitions in the chemical industry in 2010. At this juncture, energy companies in the Middle East, Asia and Russia are scouting for assets and distribution networks in Europe, where faced with competition from the new capacities in the Middle East, petrochem makers are considering an exit from commodity products.
BASF is in talks to form a joint venture for its styrene unit with sales worth US$4.5 bln, while Dow is mulling sale of its similarly sized unit for Q1-2010. The sale of both assets at the same time probably makes it more difficult for both players, considering their cyclicality and commodity character and the low momentum in M&A.