The speed at which mergers and acquisitions took place in 2015 continues to baffle. By December, data published by international financial software company Dealogic shows, a total of USD 4.35 tr in takeovers had been seen across all industry segments in 2015, surpassing the record level achieved in 2007. In the plastics segment, producers increasingly spun off parts or even all of some businesses – an act which shareholders and investors believe will yield higher profits.

The plastics production scene underwent several spectacular reshuffles in 2015, as a number of leading petrochemical players merged or acquired businesses. Pressure exerted by shareholders was often at the root of these consolidations, mergers and acquisitions by means of which companies carved out a new area of focus.

No example illustrates this better than Bayer’s decision to separate from its plastics business, Bayer MaterialScience. Although the former parent still owns about 69% of the shares in the new company, rebranded Covestro and floated in early October, there is no denying the fact that a historic break has occurred – and not just because the new company’s name bears no resemblance to the so quintessentially German Bayer, which has chosen to focus on its life science activities. The old-new Covestro is Europe’s fourth largest chemical player, behind BASF, LyondellBasell and Evonik. With Bayer set to successively reduce its stake in the business, it will be interesting to see how the ownership structure will develop and whether the business – whose polycarbonate activities are already headquartered in China – will continue to move farther east. Pressure to consolidate, meanwhile, has not eased with the name change to Covestro, and the company’s board in early December announced the closure of its 170,000 t/y MDI line in Tarragona / Spain.

Known as a company to stir things up, Ineos also did not keep its feet still in 2015. Far from it. Following a long review, in mid-year the European Commission nodded off on Ineos and Solvay’s chlorovinyls joint venture Inovyn, which began operations on 1 July 2015. The business will become a wholly owned Ineos subsidiary in 2018. As a prerequisite for their okay, the authorities mandated that the two jv partners spin off a so-called “remedy business” for competitive purposes. Consisting of chlorine, ethylene dichlorine and PVC plants in Belgium, France, The Netherlands, Germany and Runcorn, this mixed bag was acquired by holding group International Chemicals Investors, and rebranded as Vynova. The birthing pains Inovyn experienced did not ease with the jv’s creation, however. Barely two months after its creation, the company was accused by the Spanish authorities of having breached an electricity interruptibility agreement, with Spain seeking back payments. Quick to respond, Inovyn said if it is made to pay the fine, the future of its site in Martorell / Spain, and its 500 employees, will be threatened. The site continues to operate. The lights are also set to go out at the jv’s plant in Schkopau / Germany – a result of Inovyn having failed to agree a suitable feedstock supply agreement with Dow.

As for the US chemicals giant, it also had an eventful year. In May Dow acquired the 50% stake of its former partner ExxonMobil Chemical in their common Univation Technologies joint venture, claimed to be the world’s leading PE technology licensor. While strengthening this particular field of its portfolio, the company in April decided to divest its chlor-alkali and downstream derivatives businesses and merge them in a new 50.5:49.5 joint venture with Olin Corporation. The restructuring was likely caused by Dow’s very public battle with shareholder Third Point, which has been pushing the company to spin off its petrochemicals business. Already during the early stages of the Olin merge, Dow hinted at additional consolidations, and in late October the company announced its decision to sell its stake in its MEGlobal joint venture in Kuwait to partner Equate. But the company waited until the year was almost at an end before releasing truly big news.

In early December several US media reported that Dow was in "advanced talks" about a merger with DuPont – one which would create a combined company worth a massive USD 120 bn. While it remains unclear whether the proposed deal will go ahead, not to mention whether it will receive the okay of numerous global regulatory authorities, it fits into the general mood of 2015, a year in which many players got infected by the "consolidation bug".

Even before the alleged merger plans with Dow, DuPont was active in this regard, too. On 1 July, the company spun off its Performance Chemicals division into the independently run Chemours company. The latter’s portfolio comprises all of DuPont’s former titanium technologies, fluoroproducts and chemical solutions activities. Both companies have since announced further streamlining measures. While Chemours has decided to close two US-based titanium dioxide lines, the pressure exerted by shareholder Trian Partners led to the resignation of long-time DuPont CEO Ellen Kullman. The new man in charge, Edward Breen, is said to be more palatable to Trian, and in November announced sweeping changes for the group’s remaining plastics activities, due to be implemented on 1 January. The reported merger plans with Dow indicate that Breen will definitely shake up the company in the weeks and months to come.

Playing to the same tune of “cost efficiency and a more customer-friendly organisation,” Sabic in October announced plans to dissolve its Innovative Plastics business. The impact has been particularly dire in the US, since the activities in question once belonged to GE Plastics. Sabic IP’s activities are to be divvied up among the company’s existing Chemicals and Polymers units, as well as a new division called Specialities. The changes could spell the end of the group’s ABS activities and will result in layoffs in both the US and Europe.

Another US player, A. Schulman, also picked up the “acquisition and consolidation” gauntlet. Taking its transformation towards becoming a speciality plastics player another step further, the company in 2015 acquired composites specialist Citadel Plastics. But true to the motto that no action comes without a reaction, the purchase resulted in the closure of three compounding plants in Evansville, Indiana / USA, home to facilities previously owned by Citadel.

Closer to home, French petrochemicals giant Total announced wide-sweeping plans for restructuring two loss-making refineries in France, including the conversion of its La Mède cluster into the country’s first biorefinery. A long time coming, the company in early October also pulled the plug on its cracker in Carling, eastern France. Also in France, Huntsman in 2015 announced its intention to close several operations at its titanium dioxide plant in Calais – part of its plan to cut up to 900 global positions, mostly in Europe.

Other movers and shakers whose image changed irreversibly in 2015 include Dutch chemicals giant DSM, which in March brought its polymer intermediates and composite resins businesses into a joint venture with CVC Capital Partners. The move allows the company to focus on its Nutrition and Performance Materials businesses. Another restructuring in the specialities area occurred in August, when Switzerland’s Clariant spun off its Plastics & Coatings business into a wholly owned subsidiary, due to begin operations on 1 January.

Non-European players also played the M&A game in 2015. Those who thought that Indorama’s appetite for further acquisitions had been satiated in 2014 were proven wrong. The Thai company this year further strengthened its global leadership position, with a specific focus on south-eastern Europe. In Turkey, Indorama bought the completed, but not yet operational 252,000 t/y PET plant built by India’s Polyplex. If there were doubts about its role before, this purchase underlined Indorama’s new position as the PET market leader in southern Europe. Further reinforcing its market leadership, the company in November acquired Cepsa Quimica’s fully backward integrated PET plant in San Roque / Spain.

Illustrating the pressures faced by Asian players in particular was the announcement in November by Lotte to acquire fellow South Korean player Samsung’s polymers activities in a mega-deal worth USD 2.5 bn. Claimed to be the biggest purchase in the history of the country’s chemical industry, it exposes the problems dogging South Korea’s chemicals sector following China’s increasing self-sufficiency. In this region, too, fundamental changes are underway, and historical annals will show that 2015 was the year the ball got rolling.

The consolidation in the European plastics packaging segment proceeded apace. Although the transactions made in 2015 were not nearly as spectacular as those of the preceding years, the tough competition in this particular market segment did take a toll. The at times dramatic supply situation only made matters worse, further lowering packaging producers’ profitability.

Acquisitions in Africa and other regions with a high growth potential dominated the scene. Constantia Flexibles, for instance, purchased its South African competitor Afripack, and its six plants located south of the Sahara desert. Fellow packaging giant Amcor meanwhile acquired the flexible packaging business of another South African company, Nampak. A little later the Australian group bought Packaging India, a company with three plants producing flexible packaging on the subcontinent. Amcor also strengthened its Rigid Plastics business in 2015 when it took over North American PET performs manufacturer Encon. Another company that enlarged its rigid packaging portfolio in 2015 was Bemis, which purchased Emplal Participações and its two plants in Brazil. Weener Plastic Packaging also struck in the Latin American country, acquiring full control of its former joint venture Weener Globalpack.

Alpla increased its presence in developing markets as well. The packaging and bottle producer opened three new global plants in 2015, located in India, Mexico and Saudi Arabia. In addition to that, the Austrian group also acquired the Egyptian operations of its Greek competitor Argo. But Alpla did not leave it at that. In Europe, the company bought Italian PET preforms market leader Plasco. When it comes to the development of the new biomaterial PEF, however, things are moving slower than expected. Serial production of the material, which is supposed to replace PET in bottles, was originally scheduled to begin in 2016 but has now been postponed to 2018.

There were a number of other M&As in Europe this year. Both Constantia Flexibles and Weener were not only on the buying side in 2015 – the two companies themselves were the targets of private equity transactions. While Lindsay Goldberg sold Weener to 3i, One Equity Partners gave up its majority control of Constantia to French investor Wendel.

Staying in the packaging realm, RPC completed its mega-takeover of Iceland's Promens and Denmark’s Faerch Plast bought Sealed Air’s European food trays and sealing films business. In a move aimed at raising its activities in intelligent packaging, US injection moulder Nypro bought Spain's Plasticos Castella. Meanwhile, in Germany, film producer Polifilm Extrusion purchased Mondi’s plant in Osterburken, while another German player, Cofresco, acquired UK film supplier and competitor Wrap Film Systems. Meanwhile, German thermoformed and injection moulded food packaging producer KIV-Kreis was purchased by France’s Groupe Guillin.

The transactions were often followed by a new name. After a management buyout, Huhtamaki’s former film business is now known as Infiana. Weidenhammer has also had to shed its famous name as part of being integrated into Sonoco. Come 2016, the company will operate as Sonoco Consumer Products Europe. In other instances names were changed without any switch in ownership. As such, Luxembourg-based plastic closures and caps producer Procap now operates as United Caps. A player that has vanished entirely from the market is Constar Plastics. The Dutch producer of PET preforms and bottles – a remnant of the former US group Constar – was officially dissolved in November.

The automotive interiors business apparently no longer generates enough profit for many players – even though it is this field in particular where so many future visions can still be realised. No more steering wheels but manoeuvres by voice control, relaxation time as opposed to road rage, revolvable front seats and high-gloss cabinets as opposed to simple shelves – in other words, a drivable extension of the living room. Despite this myriad of possibilities, the OEM market was dominated in 2015 by companies or business divisions that manufacture seats, dashboards and similar products.

Magna divested its Interiors business, thereby enabling buyer Antolin to move up into a higher league. Johnson Controls – once the quintessence of interior components – will probably no longer exhibit at the leading "IAA" fair in the future after its entire seat and interiors activities have become victims of management's grander plans for the company.

On the whole, however, the automotive segment continues to rev its engine the world over. Although not that long ago doubts still existed about whether and in how far the industry would be able to recover, not to mention whether its standing would suffer, aside from a few exceptions – including Russia – that is no longer the case. Plenty of money continues to be made.