US plastics industry reasonable acquisition

In the 1990s, the US economic bubble was about to burst. The U.S. plastics industry, like other industries, has frequent business mergers and acquisitions. With the economic recession, mergers and acquisitions in the US plastics industry tend to decline. As plastics processors in the United States are currently in the lowest period of production capacity utilization for 20 years, the current market situation is even more severe for M&A plastics companies.

From 1993 to 2000, as the processors pursued greater economies of scale and entered more market areas through business acquisitions, facing a market with abundant capital, high demand, and optimism, the highly branched US plastics industry began. There are epoch-making structural adjustments and business restructuring. The number of business mergers and deals in the U.S. plastics industry was the highest in 1996, at 222; the largest deal was in 1998, at $19.9 billion. Many companies that buy businesses pay too much for the production capacity of acquisitions, and the production capabilities of these acquisitions may be useless or unnecessary to them.

Since 2001, economic downturns and sluggish markets have significantly reduced the mergers and acquisitions of plastics companies, and the reduction in this activity has also had a negative impact on the economy as a whole, which has directly caused the decline in the competitiveness of enterprises and the economic downturn. Plastics industry in other parts of the world is also affected by the economic downturn and the market weakness.

Industry insiders predict that the whole macro economy will improve in 2004, and mergers and acquisitions in the plastics industry will increase. However, in this round of business mergers and acquisitions, plastics companies will be more sensible and conduct appropriate-scale acquisitions. In the 1990s, plastics companies tried to eat up competitors and gain market security. Plastics companies must now consider their overseas competitors and the market conditions in which they buy and sell their business. The plastics industry is entering a buyer's market. At the same time, plastics companies have to concentrate more on developing key businesses and more rational business development. Therefore, plastics companies must consider the purpose and prospects of their business expansion before conducting business mergers and acquisitions, and rather than blindly expanding their business is critical to the company's healthy and sustainable development.