2017 Global Chemical Industry Mergers and Acquisitions Outlook
Driving forward through global uncertainty
"2017 Global Chemical Industry M&A Outlook" explores issues central to the global chemical M&A climate and seeks to address pivotal questions such as: What does 2017 spell for chemical M&A markets? Will global activity remain as buoyant as it has been lately? Have mega-deals served to satisfy the need for global consolidation? Have shareholder activists left the industry? Will capital outflow concerns lead to reduced participation by China?
Viewpoints / key findings
- While global Chemical M&A activity is expected to increase in 2017, geopolitical factors could prevent the industry from achieving the record levels experienced in 2015 and 2016.
- Higher cash levels on corporate balance sheets, low levels of innovation, and a low growth macroeconomic outlook are expected to drive M&A volumes.
- Companies are increasingly focused on gaining access to technological capabilities and are creating corporate venture capital (CVC) divisions to help support new investments.
- Fertilizer, agriculture, industrial gases, and diversified chemical segments are expected to continue M&A activity.
- Mega deals valued at over US$1 billion have become more common with 41 deals taking place over the past 3 years, compared to 30 deals during 2011–2013.
- Dealmakers remain optimistic about M&A activity in the US, while it remains depressed in Brazil.
- The UK should continue to be an attractive market for both strategic and financial buyers, while German chemical companies continue to focus on acquisitions.
- In Africa, the chemical sector will likely remain influenced by global and local factors including market consolidation and investment into agricultural chemicals.
- In APAC, both inbound and outbound mergers in China will likely increase in 2017, and vibrant M&A activity is anticipated in India due to strong economic growth.