Chemical compounds: Fourth-quarter 2015 chemical industry mergers and acquisitions analysis

February 2016

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Chemical compounds: Fourth-quarter 2015 chemical industry mergers and acquisitions analysis

2015 ends with the December announcement of a $62.1 billion merger between two chemical giants, in an otherwise flat year for M&A in the Chemicals sector.

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Chemical compounds is PwC's quarterly analysis of merger and acquisition (M&A) activity in the global chemicals industry. It provides an overview of the most recent M&A results and our expectations for future deal activity.

Highlights of what this quarter's analysis revealed:

  • Dow Chemical Co. and EI du Pont de Nemours & Co. announced a definitive agreement under which the companies will combine in an all-stock merger of equals worth $62.1 billion
  • Absent this transaction, total deal value in the Chemicals sector remained relatively flat, with a slight decline of 1.3% in 2015
  • Amid weak revenue growth, an effort to achieve operational efficiency, competitive advantage, and geographic and customer base expansion emerged as primary motivations for consolidation in 2015
  • Shareholder activism continues to play a role as well, as investors seek to rightsize portfolios with the divestiture of non-core and underperforming businesses
  • While declining commodity prices and a strengthening dollar remain a key concern for US chemical producers in 2015, some companies focused on business optimization and portfolio changes, while others remained focused on high-growth businesses
  • Oil prices continue to remain low on a historic basis, which can help offset margin pressure in many chemical segments
  • As a result of this lower feedstock cost environment additional funds are expected to free up for continued M&A activity in some of these segments

Download the analysis to review all the key trends from 4Q15.

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