Global chemicals deals insights: Q1 2019
Executive summary
Chemicals industry deal activity remained upbeat during the first quarter of 2019 with the announcement of two potential megadeals, a $69 billion and a €5.8 billion acquisition. Investments in and valuations of the Specialty Chemicals category continued to be significant amid smaller supply while Commodity Chemical valuations continued to remain relatively flat given balanced demand and availability. Private equity-sponsored transactions remain steady, accounting for approximately 33% of deal volume.
Key trends/highlights
- Deal value in this quarter was the highest vis-à-vis the previous 12 quarters. The value grew by 3.5x to $86.3 billion when compared to the same quarter last year and 6.3x when compared with Q4 2018. These increases were driven by a potential $69 billion megadeal.
- In volume terms, Q1 2019 recorded 168 deals, a decline of 24% and 28% when compared to Q1 2018 and Q4 2018, respectively.
- Average deal size in Q1 2019 grew considerably to $1 billion, 9.8x more than the prior quarter, driven mainly by two megadeals.
“Given the stability of the broader economy during the first quarter of 2019, the record levels of cash available at both private equity and corporates, and the continued focus on portfolio coherence, the outlook for Chemicals M&A activity continues to be upbeat, offsetting any impact from unknown macroeconomic factors such as trade tariffs and Brexit.”
