(Updates with background on M&A activity)
By Ben Martin
LONDON, Feb 7 (Reuters) - British specialty chemicals maker Croda International Plc has held unsuccessful talks with U.S. peer Ashland Global Holdings Inc about a possible merger, a source familiar with the matter told Reuters on Wednesday.
The aborted deal talks show that Kentucky-based Ashland is viewed among its rivals as a potential target for consolidation in the sector, following the initial public offering (IPO) of its automotive lubricants unit Valvoline Inc in 2016.
Croda, which has a market value of 5.6 billion pounds ($7.79 billion), had discussions with Ashland as recently as last month, the source said. Details of the terminated talks were not available.
Ashland has a $4.6 billion market capitalisation and is active in more than 100 countries, providing chemicals products to various industries including automotive, energy and construction.
The IPO of its Valvoline business marked the last stage of the company's move away from oil refining to focus on specialty chemicals, a shift that took a decade.
Ashland did not respond to a request for comment. Croda declined to comment.
The talks between the two chemicals firms comes amid a surge in dealmaking since the start of 2018. Global merger and acquisitions volumes reached $332.8 billion last month, making it the busiest January for deals since 2000, when markets were gripped by the dotcom bubble, Thomson Reuters data shows.
The jump in M&A activity has included British companies, with Melrose Industries last month launching its hostile pursuit of FTSE 100 engineering business GKN and Informa striking a deak to acquire conference organiser UBM
Shares in Ashland were down 2 percent at 1558 GMT and Croda stock was up 2.8 percent. ($1 = 0.7191 pounds) (Additional reporting by Greg Roumeliotis and Pamela Barbaglia; Editing by Louise Heavens and Adrian Croft)