20200411-德勤-2020_Global_chemical_industry_mergers_and_acquisitions_outlook__Clearing_the_hurdles_25页_1mb

报告摘要

2020 Global Chemical Industry Mergers and Acquisitions Outlook Summary

Core Content

The 2020 Global Chemical Industry Mergers and Acquisitions Outlook highlights the evolving dynamics of the industry, emphasizing the challenges and opportunities in M&A activity amidst trade tensions, geopolitical events, and sustainability trends.

Main Points

1. Trade and Geopolitical Tensions

Trade tensions between the US and China have intensified, leading to increased tariffs and economic uncertainty.
The September 2019 attack on Saudi Arabia's oil infrastructure disrupted supply chains.
Brexit's uncertain future, including a potential negotiated exit, continues to affect European markets.
Ongoing US-Iran military strikes have impacted oil prices and created volatility.

2. Big Oil and SOEs Moving Downstream

Traditional oil and gas companies and state-owned enterprises (SOEs) are increasingly investing in petrochemicals.
Saudi Aramco's $69.1 billion acquisition of SABIC (70% stake) was the largest chemical deal of 2019.
With declining fuel demand, petrochemicals are seen as a more promising growth area.
Oversupply in some commodity chemicals may create margin pressures and reduce M&A interest.

3. Sustainability and M&A

Sustainability is becoming a key driver for chemical companies, influencing supply chain and business model strategies.
While few M&A deals are explicitly driven by sustainability, there is a rise in non-traditional alliances and joint ventures aimed at circular economy goals.
Examples include LyondellBasell and SUEZ's joint venture for recycling post-consumer plastic and Eastman's partnership with Circular Polymers.
A $120 billion market opportunity is forecasted in the US and Canada for recovered waste plastics.

4. Private Equity's Role

Private equity activity declined from 2015 to 2018 but showed a modest recovery in 2019.
The 2018 Nouryon transaction ($12.5 billion) significantly affected 2019 value.
Private equity groups are playing a critical role in acquiring non-core assets and building companies for eventual sale to corporate acquirers.
Deals such as Lone Star's pending acquisition of BASF's Construction Chemicals and Advent's acquisition of Evonik's Methacrylates business illustrate this trend.

5. M&A Activity by Chemical Sector

Commodity chemicals: Slight increase in volume but still below 2014–2017 levels. The sector is likely to focus on efficiency rather than expansion in 2020.
Specialty chemicals: Strong valuation multiples and significant transaction activity, especially in food flavorings and additives. Notable deals include IFF's $26.2 billion merger with DuPont Nutrition and Biosciences and Nippon Paint's $3.1 billion acquisition of DuluxGroup.
Fertilizers and agricultural chemicals: M&A activity was relatively low in 2019 due to trade tensions and weak commodity prices. A potential merger between Sinochem and ChemChina could drive activity in 2020.
Industrial gases: Activity in 2019 was lower in value but higher in volume, with most deals concentrated in Asia. 2020 is expected to follow a similar pattern.
Diversified chemicals: Limited deal activity in 2019, with a major transaction being Showa Denko's $8 billion tender offer for Hitachi Chemical. Portfolio pruning remains a key strategy.

6. M&A Activity by Geography

The US led in M&A value in 2019, with $41 billion in deals, followed by Japan at $17 billion.
China saw flat deal volumes but a significant drop in value, due to the absence of mega-deals.
The UK experienced slight increases in both volume and value, with international interest in UK assets, particularly in the specialty chemicals space.
Germany showed increased M&A activity despite economic and automotive sector challenges, driven by differentiation strategies and supportive economic conditions.

Key Information

2019 M&A Trends: M&A volumes declined slightly (-3%), but value increased significantly due to large deals like the Saudi Aramco-SABIC and IFF-DuPont mergers.
2020 Outlook: Uncertainty from trade tensions, geopolitical events, and economic conditions may persist, potentially affecting deal volumes. However, the chemical industry is expected to continue M&A activity, especially in specialty chemicals and through private equity.
Sustainability: The circular economy is creating new M&A opportunities through alliances and partnerships focused on recycling and waste management.
Private Equity: Expected to remain a key player in 2020, particularly in acquiring non-core assets and building companies for eventual sale.
Geographic Trends: The US and Asia are expected to remain strong M&A markets, while Europe faces more uncertainty, particularly in the UK and Netherlands.

Summary Outlook for 2020

The chemical industry will likely face continued challenges from trade tensions, geopolitical instability, and economic slowdowns.
Despite these hurdles, M&A activity is expected to remain robust, especially in the specialty chemicals sector.
Sustainability initiatives may lead to more non-traditional M&A activity, including joint ventures and alliances.
Private equity will continue to play a critical role in driving M&A through capital deployment and asset acquisition.
The US will remain a key M&A market, while China's domestic consolidation efforts will likely continue.
The UK may see a slight increase in M&A activity due to international interest and a stable economic environment.
Germany is expected to maintain its M&A momentum through differentiation strategies and favorable financial conditions.

Conclusion

The chemical industry's M&A landscape in 2020 is shaped by a mix of challenges and opportunities. While geopolitical and economic uncertainties may dampen deal volumes, the sector is expected to continue its M&A activity, particularly in specialty chemicals and through sustainability-driven partnerships and private equity involvement. The role of private equity and the pursuit of efficiency and differentiation will be key factors in shaping the industry's M&A strategy.

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