Global chemicals M&A deals insights:

Q4 2016 update
 

Executive summary

Global Chemicals M&A closed 2016 on an upward swing. Total deal value of $46.9 billion (for deals with disclosed value greater than $50 million) was 128% higher than the last quarter. Deal volume was also stronger as Q4 brought 38 new chemical deals, a 52% increase from the last quarter. On average, the sector has seen 140 deals in each of the last two years.

Two thousand and sixteen experienced several industry-altering transactions as (i) in February, ChemChina announced its acquisition of Syngenta, (ii) in May, Bayer announced its acquisition of Monsanto, and (iii) in December, the Praxair/Linde merger announcement was confirmed after a previous failed attempt. These three megadeals alone account for 68% of the total deal value announced in 2016.

While the volume of transactions remained highest in the Asia & Oceania region, this year saw a significant move towards cross-border transactions. Seventy-eight percent of deal value in 2016 is attributed to transactions made outside country boundaries, compared to only 24% in 2015.

The recent stability of feedstock prices may have led to a decline of a number of new transactions in the Fertilizers and Agricultural Chemicals space in Q4, a category that has been very active and has experienced the highest premiums in Chemicals M&A over the last few years.

chemical deal value and volume
chemical deal value and volume data

chemical deal disclosed value

Key trends/highlights

  • In 2016, the Global Chemicals M&A deal value totaled $198 billion, a 39% increase compared to 2015.
  • Praxair’s $35 billion acquisition of Linde was the largest transaction announced in Q4 2016. This megadeal accounts for 75% of the total deal value in this period.
  • While the Fertilizer and Agriculture category led deal value in 2016, the Industrial Gases category had the largest transaction in Q4 2016.
  • Bayer’s $55 billion acquisition of Monsanto in May 2016 was the largest transaction of the year solidifying Bayer’s market presence in the agricultural market and high-tech crops.
  • Financial buyers’ share of Global Chemicals M&A deal value remained low throughout 2016, averaging just 6%.
  • There remains regulatory uncertainty around the four pending megadeal transactions in the Agriculture and Industrial Gases subsectors.

For our full report and additional information on the Top 10 Deals announced for the year, our regional and subsector analyses, and the Outlook for this sector, please remember to download our:

Global Chemicals M&A Deals Insights: Q4 2016 update.

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Craig Kocak
US Chemicals Deals Leader
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Vijay Sarathy
US Chemicals Strategy Leader
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Pam Schlosser
US Chemicals Leader
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Seamus Jiang
US Deals Managing Director
US China Inbound Deals Leader
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Marcus Morawietz
Global Chemicals Leader
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