On the 27th, it was learned that Deloitte released the “2017 Global Chemical Industry M&A Outlook” report, indicating that global chemical industry M&A activity is expected to maintain growth in 2017, but due to geopolitical factors such as protectionism, this year’s M&A activity may not reach the industry. A record set in 2015 and 2016. The report shows that the high level of cash flow in the company’s balance sheet, the low level of innovation, and the sluggish macroeconomic growth prospects are likely to be factors in driving the growth of M&A transactions. Lower natural gas and oil prices will also drive M&A activity in the petrochemical industry.
At the same time, the volume of M&A transactions in the fertilizer and agrochemical, industrial gas and multi-chemicals segments is expected to grow strongly, expanding its scale by acquiring diversified technology solutions. Very large transactions worth more than $1 billion have become more common, with a total of 41 in the past three years, an increase of 11 from 2011 to 2013. M&A activity in 2017 is expected to focus on innovation and digitalization. As valuations soar, companies will likely rely more on sales growth and synergies to mitigate the impact of increased transaction costs.
According to industry sources, companies are increasingly focusing on acquiring technology and setting up corporate venture capital departments to provide more support for new investment activities. Digital technology is more widely used globally and further promotes M&A activities. These global trends are expected to drive the chemical industry forward and generate more M&A deals.
Electronic Component Resource 