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.
M&A activity remains fairly stable in both sectors. In HY1, two announced life sciences deals crossed the $20 billion mark. Medtech companies have announced 509 mergers and acquisitions over the same period, of which six rank among the top 10 in life sciences announced deals. Transactions in chemicals spread across the value chain, with further consolidation expected in specialty chemicals. 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.
KPMG and the UN Global Compact have developed the Sustainable Development Goals (SDG) Industry Matrix to inspire and inform greater private sector action to drive inclusive, sustainable prosperity. It provides shared value opportunities for the ENRC industry to contribute to each of the 17 Global Goals for sustainable development, and these opportunities are illustrated through multiple examples of leading practices from companies. The publication also includes good practice industry principles and global multi-stakeholder partnerships.
The current study "Time to flourish - digital transformation of the chemical industry" shows that competitiveness requires a clear digitization strategy.
Competitiveness in times of levelling differentiators.
KPMG and the UN Global Compact have developed the Sustainable Development Goals (SDG) Industry Matrix to inspire and inform greater private sector action to drive inclusive, sustainable prosperity.
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.
ReactionTime: Issues impacting Chemical industry
Welcome to the first edition of ReactionTime, the KPMG Global Chemicals Institute’s monitor of key issues for decision makers in the global chemicals sector. Reaction Time offers insights from KPMG thought leaders on the trends that are driving and shaping chemical companies today.
Deal Capsule - Transactions in Chemicals April 2016
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.
Deal Capsule - Transactions in Pharmaceuticals April 2016
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.
Deal Capsule - Transactions in Chemicals January 2016
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.
Deal Capsule - Transactions in Pharmaceuticals January 2016
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.
Integrated control systems: new opportunities and cyber risks for chemical manufacturers
Once designed to operate in isolation, chemical manufacturing control systems are now being connected to the virtual world.
Cash is always king: How chemical companies are optimizing their working capital management
During the global downturn, working capital management was top of mind for the chemical industry. With today’s increased revenues and ready access to cheap debt, companies might feel that they have fewer incentives to change their processes.
The growing global challenge: Managing anti-bribery and corruption compliance in energy and natural resources
Companies in the energy and natural resources (ENR) sector face an increasingly complex operating environment around the world, not least in the field of compliance – and especially in the area of anti-bribery and corruption (ABC).
Deal Capsule: Transactions in Chemicals - Q3 - 2015
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.
Deal Capsule: Transactions in Pharmaceuticals - Q3 - 2015
KPMG’s Deal Thermometer indicates that the environment for M&A activity will remain ‘Hot’ in pharmaceuticals.
Global automotive industry growth driving demand for chemical products
With few exceptions, the global automotive industry has made a solid recovery from the downturn in 2008.
Building the 21st Century: chemicals and the global construction industry
Specialty chemicals have helped shape today’s global construction industry, introducing new levels of structural strength.
Supply chain optimization: preparing chemical companies to better perform in a volatile world
Shifting patterns in supply and demand, cost pressures, market segmentation mean that chemical supply chains need to be increasingly agile.
Deal Capsule: Transactions in Chemicals & Pharmaceuticals
This report includes disclosed and undisclosed values for M&A transactions including minority stake purchases, acquisitions of remaining interest, and recapitalizations and it explicitly excludes self-tenders and spinoffs.
Unlocking the Value of Social Investment
This edition of Sustainable Insight explores corporate and foundation approaches to measuring and reporting social investment, and presents a framework to help companies improve the effectiveness of social programs.
A changing industry for India’s chemical companies
As one of the emerging “tiger economies” of Asia, India has long enjoyed rapid growth.
Is your chemical company operating effectively?
Chemical companies are developing new enterprise-wide operating models to help them streamline decision making, reduce overcapacity, improve performance and increase their competitiveness.
Tax Opportunities for Chemical Companies with the Shale Gas Revolution
Today’s business news is filled with stories about the “shale gale” of natural gas now available through hydraulic fracturing (fracking) and horizontal drilling in the US.
China's 12th Five-Year Plan: Chemicals
China's traditional export driven business model, with its emphasis on cost competitiveness, standardisation and middle-to-low technological content, is being eclipsed by new economic drivers and priorities in China.