2018 Global chemical industry mergers and acquisitions outlook


2018 Global chemical industry mergers and acquisitions outlook

In search of growth

The global chemical industry has experienced several years of strong mergers & acquisitions (M&A) activity, as companies pursued growth, realigned their portfolios, and focused on core competencies. The 2018 Global chemical industry mergers and acquisitions outlook explores trends and barriers that will impact the global chemical M&A activities in 2018.

Strong M&A activity expected

Global chemical M&A activity in 2018 is expected to remain strong, as high valuations continue to be mitigated by improving global economic conditions, continued inexpensive financing, and an appetite among industry participants for growth and transformative M&A transactions.

The 2017 outlook questioned whether shareholder activists had left the industry. M&A activity in 2017 clearly answered that question, as activists re-emerged and made a significant impact on some of the largest deals, both as deal supporters and as blockers to deal completion.

Deloitte developed the 2018 Global chemical industry M&A Outlook that will give an insight on what the following year will bring for the chemical industry. The outlook covers expected M&A activity, growth opportunities and other relevant questions. Even though M&A activity in both value and volume decreased from 2016 till 2017, expected is that volume rates will increase again in 2018.

2018 Global chemical M&A outlook

M&A activity in Dutch chemical industry

The Netherlands is known for being one of the leading suppliers of chemical products and services in Europe. Besides having a superior logistics infrastructure, the Netherlands has great access to raw materials and superior R&D institutes. With many of the worlds' top chemical companies having significant operations, the Netherlands is not surprisingly considered one of the global hubs for the chemicals industry.

For the Dutch chemical industry, M&A activity was, in both volume and value terms, lower in 2017 than in 2016. However, for 2018 the M&A volumes are expected to increase. Especially taking into consideration AkzoNobel’s spin-off or sale of its specialty chemical business, a potential tie-up between the remaining coatings business and other potential partners in the industry and Royal DSM’s idea to monetize its investment, we look forward to see what 2018 will bring.

Deloitte knows the chemical industry - covering the entire spectrum from base chemicals, intermediates to true “specialty” and advanced materials - very well. Last year, Deloitte supported the German Chemical Industry Association (VCI) in the study 'Chemistry 4.0 - Growth through Innovation in a transforming world' to identify the challenges and trends impacting the chemicals industry. The growth in fast growing markets and the liberalization of state-owned enterprises are one of the trends that became visible during this study. 

More information on M&A in the chemical industry?

Do you want to know more on mergers and acquisitions in the chemical industry? Please contact Klaasjan Doeswijk at +31 (0)88 288 53 69.

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