New Kearney study shows a rising M&A trend in the chemicals industry
The Breakdown
The chemicals and specialty polymers industry stands at an inflection point, with a new Kearney study signaling a pronounced rebound in M&A activity for 2025. Over 60% of surveyed industry executives worldwide anticipate increased deal flow, driven by the imperative to navigate persistent global volatility, geopolitical trade realignments, and evolving regulatory environments. In response to recent years of subdued growth and mounting supply chain pressures, leaders are leveraging acquisitions as a primary lever to bolster resilience and realign portfolios—frequently at the expense of R&D/organic investment. Deal structuring is adjusting accordingly: earnouts, phased closings, and multi-layered pricing are now standard to mitigate valuation uncertainty and exposure in volatile markets.
Analyst View
Industry leadership is recalibrating toward growth through consolidation, as evidenced by rising executive confidence in M&A across North America, Europe, and Asia Pacific. The shift is particularly pronounced in regions where tariff dynamics or regional trade blocs are compelling companies to re-shore or redefine operational footprints. Facing compressed exit multiples and a persistent mismatch between buyer and seller expectations, deal structures now reflect a rigorous approach to hedging valuation risks, signaling a more disciplined and strategic deployment of capital.
Competitive differentiation is increasingly hinging on the active management of portfolios to capture cost synergies and access high-growth specialty segments. Notably, local consolidation is accelerating in Asia, while the U.S. market is attracting both domestic and foreign buyers amid relative economic outperformance. At the same time, financial sponsors and sovereign wealth funds are playing a heightened role, particularly in specialty verticals, reshaping the industry landscape and creating new partnership models. However, the sector faces significant headwinds: most notably, valuation opacity, uncertain regulatory outcomes, and supply/demand imbalances that are impacting the pace, structure, and rationale of deals.
Navigating the Signals
For B2B leaders, the most urgent imperative is to address how valuation uncertainty and shifting supply chain requirements may affect both growth and operational agility. As financial and strategic buyers escalate their interest in carve-outs and specialty buy-outs, boards and management teams must scrutinize internal capabilities for responding to deal competition, managing integration complexity, and sustaining value in the post-merger environment.
Decision-makers should be questioning: Are we prepared to deploy flexible capital in environments where regulatory risk and valuation headwinds persist? How robust is our channel support for newly acquired or divested assets, and can we effectively capture anticipated synergies without disrupting customer or supplier relationships? Looking ahead, leaders must examine their portfolio through the lens of resilience—ensuring that go-forward moves in M&A, partnerships, or organic reinvestment align with long-term strategic ambitions, not just short-term tactical responses to volatility.
What’s Next?
Breakthrough Marketing Technology empowers specialty chemical and polymer leaders to make confident, insight-driven decisions in dynamic market environments. Our approach enables you to:
- Quantify and monitor the evolving needs of downstream B2B customers, providing early signals for demand-side risk and opportunity.
- Benchmark competitive alternatives and track value chain shifts, ensuring your solutions remain differentiated and relevant.
- Assess “fit” and receptivity of new channel partners and models for growth strategies resulting from M&A or carve-out scenarios.
- Anticipate regulatory impacts on asset optimization and portfolio strategy, enabling proactive risk mitigation.
With our analytical frameworks and industry-tested diagnostics, we illuminate the uncertainties that matter most—so you can seize opportunities before your competitors do.
Source
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