Article
2021 Global chemical industry mergers and acquisitions outlook
From recovery to growth
While the chemicals industry is experienced in navigating headwinds, the global pandemic brought with it some unique challenges that caused many chemicals companies to focus inward, putting M&A transactions on pause. Despite the pause in M&A caused by COVID-19, 2020 still finished with solid M&A activity in the industry, with over 500 transactions, 8 of which were in excess of $1 billion. How are chemical executives re-prioritizing in the face of this global pandemic heading into 2021?
After four straight years of mergers and acquisitions (M&A) volume declines, will 2021 finally buck the trend or will the declines continue? How did COVID-19 impact 2020 global chemical M&A activity? Will the chemical industry’s move toward sustainability take a back seat as companies tackle the challenges presented by COVID-19, or will they continue to look to M&A to help drive their sustainability agenda?
With 2020 behind us and 2021 ahead, we thought it would be an opportune time to take the pulse of chemical executives and determine their sentiments regarding the M&A market and their upcoming priorities. What insights can be gained from our M&A survey as it relates to the M&A appetite among chemical executives as 2021 continues?
We will explore this in the 2021 Global chemical industry mergers and acquisitions outlook.
Deloitte polled 35 global executives at chemical companies across chemical subsectors and geographies between September 10 and November 3, 2020, to assess current and future M&A plans. Chemical executives were nearly unanimous in their positive M&A outlook looking forward to 2021, sending a clear signal that M&A activity will be an important lever as their companies recover and look for growth this year.
Executive summary
In 2019, global chemical M&A volume dropped by three percent from 2018. However, the industry displayed robust M&A activity even amidst global uncertainties. With continued trade tensions, geopolitical events and slowing economies forming barriers to growth, can the chemicals industry overcome these hurdles and nourish continued M&A activity in 2020?
How will the trends observed in 2019 impact the industry in 2020? Which chemical sectors will drive M&A activity? Will the increasing challenges faced by the chemical industry reduce M&A or incentivize players to use M&A to grow? Will chemical companies and private equity be more hesitant to pull the trigger on acquisitions, or will the hesitancy be outweighed by the tailwinds of abundant capital and low interest rates? The 2020 Global chemical industry mergers and acquisitions outlook answers these questions and examines the deal activity across major markets and sectors.
Energy and industrials trends in 2021
Our industry outlook collection, covering oil, gas, and chemicals; power, utilities, and renewables; and industrial products and construction, evaluates sector landscapes to help executives better plan for success and unforeseen challenges.