Chemical plants consolidating

Over the last few years, nearly all of the largest chemical companies have been involved in very large, global merger or acquisition transactions (see table below). For many of these companies, organic growth has been stubbornly low since the financial crisis (volume growth in the 1-2% range), which prevented them from achieving earnings growth at rates they had been accustomed to in the past.

In addition, the 2015/2016 time frame was especially challenging for chemical companies with industrial and/or agriculture end-market exposure, given the cyclical headwinds from lower commodity prices and slower global economic growth.

Thus, any transactions that further consolidates market share in the hands of these competitors should be a net positive to Axalta, all else equal.In 2017, it had more than 5,400 such companies that generated more than 2 trillion yuan (7.64 billion) in revenue, said a report on news website on Thursday.The renewed focus on safety stemming from the explosions will speed the process, according to Lin.Through careful, consistent observation of the businesses we follow and the environments in which they compete, the Diamond Hill research team strives to build a cumulative knowledge base over time.This knowledge, coupled with our intrinsic value philosophy, enables us to uncover attractive investment opportunities.

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