Artikel
2019 Global chemical industry mergers and acquisitions outlook
Navigating headwinds
With rising interest rates, increasing global trade tensions, and slow-moving economic growth, 2019 chemical mergers and acquisitions (M&A) volumes are predicted to be slightly lesser than the previous years. However, the M&A activity in the global chemical industry has continued to flourish, even in uncertain times and could continue to provide a robust market for growth.
Executive summary
Global M&A volume in 2018 declined by 5 percent compared to 2017, but remained robust and were higher than every year from 2012 to 2015. Shareholder activists have continued their interest in the industry and as observed in previous years, divestitures from mega-deals provided additional M&A activity.
Will the trends observed in 2017 and 2018 continue to drive M&A activities in 2019? Which chemical sectors will drive the major deals? Will the continuing trade tensions impact deal activities in certain geographies? Will the gathering headwinds be an obstacle for upcoming deals? These are some of the questions explored in our 2019 Global chemical industry mergers and acquisitions outlook.
Regional outlook
In 2018, M&A activities remained solid across geographies with minor declines in certain markets including the US, China, UK, and Germany. These key markets were partially offset by increases in India, the Netherlands, Japan, and Brazil.
- US: The deal activity in 2018 remained healthy despite the slight decline in volumes in 2017. 2019 volumes are expected to be in line with the last two years.
- Germany: M&A activities declined slightly in 2018, both in terms of volume and value. The year ended with key players declaring poor financials, thus, providing a cautious outlook for 2019.
- India: The industry is expected to continue witnessing M&A growth led by base chemicals, agro-chemical, and construction chemical sectors.
- Netherlands: 2018 was a record year for chemical M&A activities in the Netherlands, valuing at US$14.7 billion─the highest in ten years. However, the uncertainty around the UK Brexit is affecting the investment climate in Europe which can in turn impact consumer confidence.
- Japan: Though some manufacturers experienced decline in revenue, the Japanese chemical sector performed well in 2018. M&A appetite has been high and is expected to remain in 2019.
Sector outlook
- One bright spot in the commodity chemical sector M&A in 2018 was the state-owned enterprises’ (SOEs) continued interest in going downstream. It triggered some of the major commodity chemical deals in 2018.
- M&A deal volumes for intermediates and specialty material companies saw declines for the second year in a row. Despite the shrinking volumes, the deal value in the sector increased to unexpected levels.
- Global M&A deal volumes for fertilizers and agricultural chemical companies have reached new highs since 2010. Activity in 2019 and beyond may skew towards fertilizers rather than agricultural chemicals where significant rebalancing and consolidation is approaching the endgame.
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