2017 global chemical industry M&A outlook
Momentum continues despite global uncertainties
Global chemical mergers and acquisitions (M&A) activity is expected to increase in 2017, but geopolitical factors such as protectionism could pose a challenge to achieving the levels of record activity the industry experienced in 2015 and 2016.
The global chemical industry has experienced several years of strong M&A activity, as companies pursued growth, realigned their portfolios, and focused on core competencies.
Questions abound: Have consolidation and portfolio realignment achieved their goals for the industry? Are there enough strong companies available to supply the M&A market? Will increasing interest rates begin to impact deal activity? Have valuations driven acquirers out of the market? These questions and others like them will be answered in due course in the global chemicals industry.
- In the Americas, buoyant activity in the United States M&A market is anticipated in 2017.
- While M&A activity in Brazil remains depressed, it is recovering steadily with the economy.
- Within Europe, the United Kingdom should continue to be an attractive market for both strategic and financial buyers in 2017.
- German chemical companies continue to focus on acquisitions to extend their value chains or complement technologies.
- M&A activity in Switzerland is likely to remain strong driven by global consolidation trends and the use of M&A to fill technology gaps or diversify portfolios.
- Portfolio realignment and several expected transactions are expected to keep the chemicals sector active in France.
- In Africa, the chemicals sector will likely remain influenced by global and local factors including market consolidation and investment into agricultural chemicals.
- In the Asia Pacific region, Deloitte expects both inbound and outbound mergers in China will increase in 2017.
- Due to strong economic growth in India, vibrant chemical M&A activity is anticipated.