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2024 global chemical industry mergers and acquisitions outlook

Resilience through the headwinds

Resulting from continued economic impacts and challenging market conditions, the chemical industry experienced a decrease in the number of M&A transactions in 2023, for the second consecutive year. Although interest rates largely stabilised throughout 2023, they remain elevated, keeping the cost of deal financing high and putting pressure on M&A activity. As 2024 begins with what appears to be a reduced M&A pipeline and appetite, it is hopeful that the rebound in chemical M&A activity is simply a matter of when, not if.

As predicted in the 2023 global chemical industry mergers and acquisitions outlook, which suggested the chemical industry would face headwinds on multiple fronts, mergers & acquisitions (M&A) activity decreased by almost 16% in volume of global M&A transactions from 2022 and consequently reached the lowest level in the last 10 years. Throughout 2023, the chemical industry faced multiple challenges including elevated interest rates, restrictive credit markets and dampened revenue and earnings performance caused by customer destocking and slower manufacturing growth. 

The volatility experienced in 2023 led many chemical companies to be more hesitant in placing bigger bets on M&A deals, resulting in fewer deals. The outlook for chemical M&A in 2024 remains uncertain, until there is more clarity on the financial performance of the industry and whether there will be a rebound in M&A.

Deloitte surveyed 49 chemicals executives across sectors and geographies to assess M&A sentiment and future M&A plans. Despite the current cyclical downturn, the long-term outlook for chemicals remains strong as, when surveyed, 86% of chemical executives were at least somewhat likely to undertake a merger or acquisition in 2024, reflecting a hopeful outlook.

Learn more about what other trends are affecting M&A decisions in the chemicals sector and download the report today.

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