2021 was a year of opportunity and challenge for the chemicals industry. Despite supply-chain issues and other operating constraints, M&A activity in the U.S. chemicals industry jumped by 44 percent in 2021 and deal values grew 138 percent, compared to 2020. (See the charts below for details)
Here are some of the key trends in M&A for chemicals in 2021:
- The uptick in deal volume was driven by a 76 percent increase in the number private equity deals, compared to 2020
- The increase in deal value was driven mainly by a rise in the number of mega-deals (greater than $1 billion)
- In cross-border transactions, inbound deal values jumped 451 percent as companies sought to expand in fast-growing economies and new market sub-sectors
- Almost all chemicals companies reported that supply-chain disruptions, material shortages, and rising transportation costs impacted operations
- Other challenges included weather-related force majeures, ongoing talent scarcity, high valuations, and increased competition for attractive deals
Overall, chemicals companies were able to handle these challenges in 2021. With healthy operating margins, cash on hand, and ready access to financing, we expect deal making in chemicals will remain strong in 2022.
Chemicals Deal Volume and Deal Value
Specialty Chemicals deal value and volume
Commodity Chemicals Deal volume and Value
Fertilizers and Agricultural Chemicals deal value and volume
Diversified Chemicals deal value and volume
Industrial Chemicals deal value and volume
Looking ahead, healthy operating margins, high deal multiples, ready access to cash and financing, and continued portfolio rationalization all suggest that 2022 will prove to be another year of impressive growth for deal making in the global chemicals industry.
In this Q4’21 report, we unpack these trends and offer deep dives on two key areas:
Download the full report to uncover what is happening in these dynamic sectors, how deals are being done today—and why.