CLOUDS LOOM OVER DEAL FRENZY

Abstract

THIS SUMMER has seen some of the largest mergers and acquisitions in the chemical industry's history. But the subprime mortgage crisis that has made cash scarce in debt markets may also influence chemical deals, observers say. Peter Young, president of the New York City-based investment bank Young & Partners, says the situation may give strategic chemical buyers an edge over financial players. Leveraged buyout (LBO) or private equity buyers borrow a lot more money, And they depend a lot more on the debt markets, he says. And Young says whether financial buyers will complete deals depends on how firmly they have secured financing. The ones that are probably at risk are the ones where they signed the deal but they don't have firm financing lined up, he says. Tracey Stover, U.S. Chemicals leader at the professional services firm PricewaterhouseCoopers, says the debt crisis may merely influence how deals are financed. We have ...