Europe
Sponsored by
EU Coating Sector Experiencing
Restructuring From M&As
Coatings
producers and
other companies
in the coatings
supply chain
are resorting to
M&As because
of prospects of
relatively slow
growth over the
next few years in
Europe.
by Sean Milmo
European Correspondent
milmocw@rodmanmedia.com
The European coatings sector is at the moment facing a wave of business re- organizations, mostly stemming from
mergers and acquisitions.
The M&As have been taking place not just
among coatings producers but also among
makers and suppliers of raw materials like resins and pigments.
With some mergers, the impact on the coatings sector may not be immediate, particularly
with deals whose effects will be global in scale.
The $60 billion merger of DuPont and Dow
Chemical, both major suppliers of raw materials
to the European coatings sector, has yet to be approved by the competition authorities even though
it was formally announced around a year ago.
Coatings producers and other companies
in the coatings supply chain are resorting to
M&As because of prospects of relatively slow
growth over the next few years in Europe.
In its latest economic forecast the European
Commission, the Brussels-based executive of
the European Union, predicted rises in average GDP growth across the Union’s 28 member
states over the next two year but only by 1.8
percent per year.
At the time there is a prospect of increasing raw materials costs because of a strong U.S.
dollar and higher oil and commodity prices.
As a result companies are opting for consolidation to raise productivity and reduce waste.
They are also seeking to expand into more
profitable business sectors with higher margins.
Often this can be achieved by linking coatings
with related products to create solutions based
on systems rather than individual products.
Another impetus behind acquisitions has
