While chemical companies, as cornerstones of the global economy, are still feeling the pain from the ongoing global pandemic, chemicals sector deals volume started to rebound in Q320 primarily a result of favorable fiscal and monetary policies which have led to the stabilization of global capital markets. Deals value, however, remained depressed with only one megadeal announced in the second half of 2020. The $12 billion Wuthelam/Nippon Paint transaction is highly strategic to both parties to realign their portfolios in the Asia Pacific region as the industry pivots to a multimodal world.
PwC's Deals Sector Leader John Potter discusses the trends driving deals and outlook for 2021.
PwC's Deals Sector Leader John Potter discusses the trends driving deals and outlook for 2021. Explore national deals trends
As most countries struggle to find a balance between containing the COVID-19 virus and opening their economies, chemical companies around the globe are facing a prolonged period of uncertainty. The profound shift in ways of being and industry paths requires chemical companies to rethink their strategies and re-evaluate their current portfolios. Ample availability of capital for large public companies and private equity -- coupled with the need to establish redundancies in their global supply chain amid geopolitical uncertainties -- could also drive an increased level of deal activity in 2021. Investment themes will likely focus on specialty chemicals, consolidation and cross-border investment.
“With no clear exit strategy of the pandemic, those who can best manage change will survive, thrive, and drive robust M&A activities in 2021.”