Insight

Chemicals M&A witnessed a downturn in Q1’22

Geopolitical disruption in Eastern Europe, slowing economic growth, and rising interest rates hit chemicals M&A in the short run.

Gillian Morris

Gillian Morris

Principal, Strategy, KPMG LLP

+1 612-305-5070

Asad Akram

Asad Akram

Manager Advisory, Strategy, KPMG US

+1 703-628-5368

After a strong year for M&A in the chemicals sector in 2021, Q1’22 saw a downturn in deal activity, based on a slowing economy, rising interest rates, inflation, and geopolitical disruption in Eastern Europe.

In Q1’22, overall deal volume declined by 46 percent to 82 percent and deal value by 38 percent $16 billion as compared to Q4’21.

Significant trends in Q1’22 M&A for chemicals:

  • Significant drop in the number of mega-deals in both the strategic and PE space
  • Decrease in domestic and outbound deal activity by 53 percent and 41 percent respectively as compared to Q4’21
  • Russian invasion of Ukraine coupled with COVID lockdowns in some parts of China resulted in reduction in international chemicals trade and prompted supply chain disruptions
  • PE firms are feeling increased pressure to consider ESG in their investment decisions
  • Leading chemical companies are transitioning towards low-carbon operating models and more conscientious environmental practices
  • Digitization and the increasing use of data by the chemical companies is providing improved visibility into deal outcomes

Despite the current slump in M&A for chemicals this past quarter, we need to keep in mind the historic highs in dealmaking achieved in 2021. Considering the overall strength of the chemical sector, dealmaking may return to normal levels later this year.

U.S. chemical activity by sector

U.S. chemical Strategic and PE activity


*Includes figures for SPAC deals (No SPAC deals registered for Q1’22)


Our Q1’22 report unpacks these trends and offers deep dives on two key areas:

Download the full report to uncover what is happening in this dynamic sector, how deals are being done today—and why.

Contributing authors

Gillian Morris

Gillian Morris

Principal, Strategy, KPMG LLP

+1 612-305-5070
Dazzle Bhujwala

Dazzle Bhujwala

ESG Climate Advisory – PE & AM Leader, KPMG US

+1 415-963-5100
John R. Arp

John R. Arp

Director Advisory, Strategy - TE, KPMG US

+1 919-664-7165
Richard Metzner

Richard Metzner

Advisory Managing Director, Strategy, KPMG US

+1 312-665-3995
Stephen Guy

Stephen Guy

Managing Director, Corporate Finance, KPMG US

+1 410-409-4159
Asad Akram

Asad Akram

Manager Advisory, Strategy, KPMG US

+1 703-628-5368