Life sciences M&A witnesses a clear upward trend of deal values and number of announced deals compared to the prior year. M&A in the chemical sector remains fairly stable. Growth strategies with a focus on advanced therapies drive M&A in life sciences. High performance materials and industrial gases dominate the chemicals deal landscape. US and China remain the most active countries in both sectors.
M&A activity remains strong in both sectors. Blockbuster deal, exceeding the $60 billion mark announced in Life Sciences. Cannabis legalization in Canada drives M&A activity. Chemical players start reaching out into end markets through M&A.
Transaction focus in life sciences heavily weighted towards hematology – four of top five deals in this area. Chemicals saw one of the largest financial investors deals. Digitalization, in particular, is driving transactions and cooperations with technology players.
Life sciences M&A is driven by oncology and the shift towards precision medicine and digital health. In chemicals, consolidation in agrochemicals is ongoing and companies are keen to invest in technology start-ups as the potential of digitalization becomes increasingly apparent to the chemicals industry. In 2017, US and China were the most active countries in both sectors.
M&A activity remains solid in life sciences with a high number of announced deals, although deal values are not expected to hit the heady levels of 2014 and 2015. Oncology drives M&A in life sciences as key players seek to optimize their portfolios in anticipation of 10.9% CAGR growth to 2030. Chemical companies are increasingly focussing their M&A on application industries. Agrochemicals remains an M&A hotspot. The closing of the DowDuPont merger brought with it a spate of anti-trust divestments. US and China remain the most active countries in both sectors.
Big pharma players continue to acquire biotechs, particularly in the oncology area. Venture Capital is also increasing investments in biotech assets.
Transactions in Chemicals focused on paints and coatings and plastics.
In chemicals, several mega deals are close to completion. Activity was spread across the value chain with a focus on agrochemicals. PE activity was subdued due to high valuations.
Pharmaceutical M&A turned its focus on biotech targets to seize late-stage assets. Generics and animal health were further key areas of interest.
Monsanto agreed to Bayer’s $66 billion acquisition offer. Consolidation in the agrochemicals and fertilizer market continues.
Pharmaceutical deal activity was strongly impacted by Teva closing the $40.5 billion acquisition of Allergan’s generics business.
Consolidation in agrochemicals continued, with Bayer proposing the $62 billion acquisition of Monsanto – the largest-ever all cash deal.
Pharmaceutical M&A was impacted by stock market volatility, while new US regulatory rules struck down the $160 billion Pfizer-Allergan merger.
Downstream specialty chemicals was the leading focus area, notably in applications, resins and agrochemicals. KPMG’s Deal Thermometer indicates that the environment for M&A activity will remain moderately strong in chemicals.
Specialization continues to be a driving force in Q1 2016, especially in sectors such as OTC, rare diseases and oncology. KPMG’s Deal Thermometer indicates that the environment for M&A activity will remain moderately strong in pharmaceuticals.
Transactions in chemicals, on the other hand, are moving up the value chain as companies seek to strengthen their positions in the high - margin specialties segment. KPMG’s Deal Thermometer indicates that the environment for M&A activity will remain ‘Moderate’ in chemicals.
Big Pharma continues to acquire biotechs to replenish its R&D pipeline, as transactions are done increasingly in the earlier R&D stages. KPMG’s Deal Thermometer indicates that the environment for M&A activity will remain ‘Hot’ in pharmaceuticals.
While the specialty chemicals segment remained attractive, consolidation in the agrochemical sector was another key deal driver, accounting for three of the top 10 announced deals during Q1-Q3 2015.
KPMG’s Deal Thermometer indicates that the environment for M&A activity will remain ‘Hot’ in pharmaceuticals.
There was a 20% increase in the completed chemical deals in HY1 2015 (versus HY1 2014). The value of the top 10 announced deal was four times higher than HY1 2014. KPMG’s Deal Thermometer indicates that the environment for M&A activity will remain ‘Moderate’ in chemicals.