In a new report, Deutsche Bank analyst Tim Jones discussed the firm’s recent week-long series of meetings with leading U.S. and European chemical companies in Houston. According to Jones, the chemical landscape is ripe for more M&A deals.

“In almost every meeting M&A was a key theme – we remain of the view that we are at the start of a North American M&A bonanza,” Jones explained.

He mentioned several drivers of this bonanza, including strong balance sheets, cheap financing and activist pressures. Jones expects that Europe will be more active in making U.S. acquisitions in coming months.

Catalysts For The Chemicals Bonanza

Deutsche Bank sees the U.S. Gulf Coast region as the top global investment region looking ahead. Jones expects China to be an important area of investment as well, but he believes that the U.S. Golf Coast will be as important for investment as the entire nation of China will be.

Despite the fact that the collapse in oil prices has flattened the cost curve, North American ethane based ethylene production still maintains…

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