Mergers/acquisitions and restructuring in the EU chemical industry: Patterns and implications

High levels of merger/acquisition activity, especially international transactions, have been a characteristic of the global economy since the mid-1980s. A significant proportion of this activity has been focused on the EU where it has been stimulated by economic integration. Research into the phenomenon has been limited by data availability. Information from a Royal Society of Chemistry database is used to examine mergers/acquisitions in the European chemical industry. This is a key sector of the European economy which has accounted for a substantial proportion of mergers/acquisitions in manufacturing. Attention is focused upon an important period of change immediately before and after the creation of the Single European Market (i.e. 1986-95). The connections between mergers/acquisitions, corporate restructuring and industry restructuring are explored together with implications for the changing geography of the EU production system. Mergers/acquisitions are both a symptom and, more importantly, a cause of accelerated change in this system as they facilitate the transformation of corporate identities. Some of the wider consequences of such transformations are addressed by exploring the geographical pattern of cross-border mergers/acquisitions in the EU chemical industry. A systematic transfer of corporate control is demonstrated as companies based in northern Europe have acquired those based in southern Europe. Reasons for this pattern are identified together with implications of post-merger/acquisition restructuring for places and, more generally, for economic and social cohesion within the EU. The need for more detailed empirical studies of corporate restructuring is stressed.