M&A in chemicals / chemistry

Mergers and acquisitions in chemicals

Chemical markets are true global markets. We help business owners of chemical companies in the sale or purchase of a chemical company. Corporate Finance in Europe knows the European chemical market very well.

We like to show you that we understand the chemical market, the relevant synergies and plans of the different buyers. We are up to date with the latest and most realistic valuations that currently occur in the market. With this knowledge we can not only help you in finding the buyer that pays the highest price, but also ensure you to find the most suited strategic partner for your business for the long run. We can help you through the complete process and take a lot of work out of your hands, while guiding the process.

The industry characteristics are significant for an understanding of M&A processes within the chemical industries. R&D performs a key role in the long-term viability of chemical firms. Because new R&D discoveries often are not in the firm's core businesses, acquisitions need to take place to grow the business. In the chemical industry, innovations are imitated relatively rapidly by large competitors. The commoditization of products may occur relatively soon after innovations.

Outlook chemicals market

The value of the European chemical market is estimated on 850 billion dollar in 2014. This will be an increase of 18% since 2009 and results in an compound annual growth rate of 3.3%. The chemicals market has been greatly affected by the global economic downturn. The commoditized nature of chemical products, lower prices and a dropped demand brought the industry in a difficult situation.

The global chemicals market is one of the world's largest in terms of revenue, and one of the most diverse in terms of products offered. Its performance has been very much affected by national and international economic situations. Therefore the recession influenced the market seriously. The outlook for the coming years is bettering.

The earning capacity in the chemicals industry might be considered as better than average. The biggest threat for the earning capacity can be found in rivalry between the existing market players. Barriers of leaving the chemicals market, the ongoing commoditization of specialty chemicals, large amount of undifferentiated products and low impact of branding puts a pressure on prices. The buyer power mostly depends on the kind of product. It varies from strong for commodity chemicals and low for specialty chemicals. Vertical integration is common in this market, especially for the commodity chemicals. M&A might be a proper solution in creating strong value chains by a buy and build strategy. The lack of substitutes and the necessity of a chemical for a certain composition are contributing to the earning capacity. Suppliers of differentiated products and specialty chemicals have a strong negotiating power as the negotiating power for commodities is low. Barriers of entering the chemical industry can be considered as high. As the market is price sensitive, installations for plants are expensive and economies of scale are necessary make the chance of the entrance of a small scale supplier to almost zero.

Leading companies

• BASF SE
• The Dow Chemical Company
• Bayer AG

BASF headquartered in Ludwigshafen in Germany is one of the world’s largest chemical companies. It employs approximately 100k people and primarily operates in Europe. Subsidiaries can be found in more than 80 countries and presence can be found in North America, Asia-Pacific, South America, Africa, and Middle East countries. BASF has operations in six business segments: chemicals, oil and gas, plastics, functional solutions, performance products, and agricultural solutions. The Verbund structure, BASF’s approach to vertical integration, links plants to create value adding chains. At Verbund sites byproducts of chemical reactions are used as raw materials instead of disposal of these materials.

BASF’s chemicals segment is organized into three divisions: inorganics, petrochemicals, and intermediates. Main products of the inorganics division are: ammonia, methanol, sodium hydroxide, and chlorine as well as sulfuric and nitric acid. These are mainly used in the electronics and pharmaceutical industry. The petrochemicals division offers basic chemicals such as: ethylene, propylene, butadiene, benzene, alcohols, solvents, plasticizers which are mainly used in the chemicals and plastics industry. The products of the intermediates division  are the starting material for the detergents, automotive, packaging and textile industries. Included products are: amines, acids, diols, polyalcohols, and specialties.

BASF’s highlights in recent m&a include the acquisition of Cognis. The announcement of selling Irgasurf to Techmer. A merger of BASF India with Ciba India. Acquisition of Bismuth Vanadate and Indanthrone Blue (BASF companies) by Dominion Colour.

The Dow Chemical Company (Dow) is headquartered in North America (Midland Michigan) and operates in North America, Europe, Asia Pacific, and Latin America. Operations can be found in 35 countries with 150 manufacturing plants. The customer base is served in approximately 160 countries. The Dow Chemical Company is employer of more than 45k people offering a range of chemicals, plastics, and agricultural products and services. Dow’s activity include six segments: performance plastics, performance chemicals, agricultural sciences, basic plastics, basic chemicals, and hydrocarbons and energy.

Dow’s recent m&a activity includes the sale of the powder coatings activities to AKZO Nobel. OMNOVA acquired the hollow sphere plastic pigment product line from Dow. ORRION Chimie acquires a French plant of Dow Chemical. The sale of sells acrylic acid, esters and specialty latex assets to Arkema. And some more m&a transactions have taken place the last time

Bayer is a chemical and pharmaceutical group headquartered in Leverkusen. The operations are organized into three business subgroups: HealthCare, MaterialScience, and CropScience.

Bayer is the holding company of the Bayer Group. It includes over 300 consolidated companies worldwide and more than 100k employees. Operations can be found in  , Europe Asia Pacific, North America, Latin America, Middle East  and Africa. Bayer offers a range of products, including ethical pharmaceuticals and other healthcare products, agricultural products, and polymers.

Corporate Finance in Europe knows your industry

Favorable profit margins induce large additions to capacity from existing and new entrant firms, resulting in downward pressures on prices and returns. This problem has been aggravated in those segments of the chemical industry in which the process development of new products is performed by specialized engineering firms capable of installing turnkey chemical production plants. This speeds the diffusion of process information, making it more difficult for innovators to maintain a competitive advantage. These market processes take place in a global setting and can affect even niche segments of the industry. Hence, corporate finance and M&A activity is essential in the chemical industry to keep at the forefront. Segments of our special attention are chemical distribution, Lifesciences, flavours and fragrances and tanning. For more information visit:

• Sell or buy a Chemical Distributor
• Sell or buy a business in Lifesciences
• Sell or buy a business in Flavours and Fragrances
• Sell or buy a Tannery

Mergers and acquisitions advisory for the chemical industry

The team of Corporate Finance in Europe has large mergers and acquisitions experience in the chemical industry. The team of Corporate Finance in Europe has been involved in selling and buying chemical companies valued between 1M and 150M Euro. The chemistry businesses that were sold normally have 10 to 250 or more employees and revenues ranging from 1M to 150M Euro. Check our teams knowledge and competences in m&a advisory chemical / chemistry

M&a transactions Corporate Finance in Europe

Over the years the team of Corporate Finance in Europe has executed very many M&A transactions in the chemical industry. We can help business owners of chemical companies very well in the sale of a chemical company. Below you will find a few examples of chemical M&A transactions our people have coordinated. Please contact us for more information. Check a concise summary of our deals done in the chemical / chemistry

Recent M&A deals in chemistry

Cross border m&a is an upcoming activity not only for large multinationals. Consolidations within the chemical industry are taking place on a large scale and apply to mid-sized businesses as well. Reasons for acquisitions in the chemical industry can be; economies of scale, synergies, product range or simply to gain market share.

See some general m&a deals in chemicals

We are happy to help you. If you have serious M&A plans in the chemical industry we invite you to contact us by email or phone so we send our M&A in chemicals presentation to you  and explain more about mergers and acquisitions in your industry.