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Partner, Deal Advisory - Valuation
KPMG AG Wirtschaftsprüfungsgesellschaft
Preview of the KPMG Deal Capsule Chemicals Newsletter
The new edition of our newsletter on transactions in the global chemicals industry glances back at the significant deals that took place in Q1-Q3 2022 and provides further insights on the industry’s market trends.
The chemical M&A market has slowed down in the first nine months of 2022. Capital market volatility, inflation risk, regulatory uncertainties and the Russia/Ukraine conflict have impacted the demand for chemicals across global end markets (especially automotive, transportation and consumer markets).
- The Chemical industry is anticipated to remain vigilant for the rest of 2022, as the deal momentum slowed down further in Q3 2022, due to rise in recession risks, spike in interest rates and heightened energy crisis.
- In addition to the impact on energy supplies, ongoing supply chain and freight transportation disruptions have led to prolonged impacts on the global chemical manufacturing operations. These disturbances may prompt companies to opt for flexible deal structures that include partnerships, combinations of assets or sellers retaining stakes with anticipation of future potential increase in value.
- Companies are undergoing significant transition in existing business models to adjust to the transformation of energy supply and rising focus on ESG factors. Active portfolio management and the rising sale of non-core activities (in the form of carve-outs) are expected to impact M&A activity in the chemicals sector.