2022年全球化工行业并购报告-21页_3mb

Chemicals Executive M&A Report 2022 Summary

Core Content

The 2022 Chemicals Executive M&A Report provides an overview of the M&A landscape in the chemicals industry over the past few years, highlighting trends, challenges, and future expectations. It emphasizes the impact of economic conditions, the pandemic, and ESG considerations on M&A activity.

M&A Activity and Outlook

• M&A Decline: M&A activity in the chemicals industry has been declining since 2019, with a significant drop in 2020. The total value of closed deals fell by almost 30% compared to 2019.
• Mega-Deals: No major mega-deals have been announced since 2020, leading to a smaller average deal size. Executives expect mega-deals to remain rare in the future.
• Rebound Expectations: Despite the downturn, chemicals executives are optimistic about a rebound in M&A activity within the next 6–12 months.
• Drivers of Rebound:
  • Supply Chain Resilience: Consolidation and vertical integration are seen as key strategies to enhance supply chain resilience.
  • Economic Recovery: Anticipation of post-pandemic economic recovery is boosting M&A confidence.
  • Capital Availability: Strategic and financial investors have access to significant capital and financing, supporting deal activity.
  • ESG Focus: ESG-related M&A is expected to grow, with a shift toward acquiring nascent technologies and sustainable businesses.
  • Portfolio Restructuring: Divestments of non-core assets are increasing, providing more acquisition opportunities.

Regional M&A Trends

• North America and Europe: North American investors regained some share in 2021, while European investors remained cautious, with a 18% share of deals.
• Asia: Asian investors maintained a high level of M&A activity, with the highest deal value in 2020. China and South Korea followed the global trend, while Japan showed counter-cyclical activity.
• Middle East and Africa: No major M&A activity has occurred since Saudi Aramco's large deals in 2019.

Changing Investment Focus and Deal Rationale

• Crisis Mode: During 2020 and 2021, chemicals acquirers focused on consolidation and scale and vertical integration to secure supply chain resilience and reduce risk.
• Deal Types:
  • Product extension/diversification: Reduced from 40% in 2018–2019 to 20% in 2020–2021.
  • Consolidation and scale: Doubled its share to 40% of high-value deals in 2021.
  • Vertical integration: Rose to 13% of high-value deals in 2021.
• Geographic Focus: Acquirers prioritized their home markets to minimize risk, leading to missed opportunities abroad.

ESG as a Key Driver

• ESG Integration: ESG has become a central focus in M&A, with 75% of executives expecting ESG-driven divestments to grow and 60% anticipating increased investments in renewable energy.
• Growth and Maintenance ESG:
  • Growth ESG: Includes acquiring mature circular tech and building integrated business models.
  • Maintenance ESG: Involves divesting high-emission businesses to reduce carbon footprints and fund clean energy initiatives.
• Partnerships and Alliances: ESG-related M&A is expanding beyond traditional acquisitions to include strategic partnerships and joint ventures, especially in the development of circular economy and net-zero technologies.

Divestments as a Key Strategy

• Divestment Trends: Divestments of non-core businesses are expected to continue, driven by ESG goals and the need for portfolio optimization.
• Value Creation from Divestments:
  • Tailoring the Deal: Identifying divestment candidates early and aligning them with buyer needs.
  • Flexibility and Competition: Keeping all options open (IPO, trade sales) and managing anti-trust risks.
  • EBITDA and Cash Flow Improvement: Enhancing performance through cost reductions and efficiency gains.
  • Cost Management: Proactive cost control during and after the divestment process.
  • Strategic Focus: Divestments can fund growth investments and lead to a leaner, more profitable portfolio.

Intense Competition and High Valuations

• Competition: Increased competition among strategic investors, financial investors, and NOCs is expected to drive up deal valuations.
• NOCs' Role: NOCs are leveraging high oil prices to expand downstream through acquisitions, aiming to access technologies and international markets.
• Synergy Expectations: While top-line synergies are expected, cost synergies are more likely to be realized. Acquirers must focus on securing value and managing expectations.

Future Outlook

• Shift in Landscape: M&A activity is expected to recover but with more smaller deals and fewer mega-deals.
• ESG as a Structural Shift: ESG could drive a structural transformation in the chemicals industry, especially with increased portfolio divestments and the evolving M&A rationale.
• Uncertainty Risks: The M&A landscape could shift dramatically if uncertainty increases, particularly due to geopolitical tensions and rising costs of feedstocks, energy, and transportation.

Key Figures and Data

• Figure 1: M&A activity has declined since 2019, with a focus on smaller deals and less likelihood of mega-deals.
• Figure 2: 2021 M&A deal value rebounded by over 50% compared to 2019.
• Figure 3: Crisis mode led to a focus on consolidation, vertical integration, and home markets.
• Figure 4: ESG is becoming a key driver, with increased interest in ESG-driven divestments and acquisitions.
• Figure 5: Strategic players are increasingly divesting non-core assets to optimize portfolios.
• Figure 6: NOCs are expected to benefit from high oil prices and drive downstream development.

Authors

• Thomas Rings (Partner, Munich)
• Tobias Lewe (Partner, Dusseldorf)
• Varun Shah (Principal, Kuala Lumpur)
• Andrew Walberer (Partner, Chicago)
• Sudeep Maheswari (Partner, Mumbai)

The report underscores the evolving dynamics of the chemicals M&A market, emphasizing the importance of ESG, portfolio optimization, and strategic focus in a post-pandemic and increasingly regulated environment.