Global chemicals M&A deal volume experienced a 47% pullback this quarter, driven by sustained uncertainty in political, regulatory, and economic environments. Despite signs of stabilized feedstock prices, the market remains prudent on new transactions.
Average deal value also dropped to $822 million in Q3 2016 after three straight quarters of industry-transforming deal announcements including ChemChina-Syngenta, Bayer-Monsanto, and Dow-Dupont. Nevertheless, the Chemicals industry in Q3 2016 was not without transformation, as Potash Corp. of Saskatchewan placed a $13 billion bid on Canadian fertilizer giant Agrium Inc. A continued trend in the Fertilizers and Agricultural segment shows that the industry is still looking for opportunity outside of commoditized products.
While the Asia & Oceania region continues to dominate the market in terms of deal volume, the highest deal value remains in Fertilizers, Agricultural and Specialty chemicals in the North American and European markets.
Still, the majority of industry transformation remains imminent. Seven of the eight largest deals in 2016 are still pending and it is not unusual for such deals to be withdrawn due to antitrust legislation or competitive bids. In September 2016, Bayer increased its takeover bid for Monsanto by 20% to solidify its competitive advantage.
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: Q3 2016 update.
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