Where have all the deals gone?
The Breakdown
Global M&A activity in the chemical and materials sector has fallen sharply, hitting multi-year lows in both volume and value of transactions. Recent high-profile deals are the exception, not the rule, as market uncertainty, macroeconomic pressures, and geographic divergence have cooled appetite for acquisitions—particularly in commodity chemicals and European assets. On the ground, there is no shortage of companies and business units for sale; the market, however, is defined by a significant lack of motivated buyers. Strategic caution now dominates industry thinking, as business leaders navigate unclear market signals and an evolving regulatory and operational landscape.
Analyst View
Customer demand signals across many chemical subsectors remain uneven, with petrochemical overcapacity, persistent economic slowdown, and high financing costs weighing on outlooks for profitable growth. This risk aversion is pronounced in Europe, where elevated production costs and legacy assets are reducing the attractiveness of sellers—both from performance and value-creation perspectives. In contrast, Asia remains active in M&A, supported by ongoing industry consolidation and relatively stronger growth fundamentals.
Multiple well-known assets in both specialty and commodity segments are available, yet caution prevails. Strategic buyers and PE managers are sidelined by volatile trade policies, such as unpredictable tariff regimes, and regulatory ambiguities that make forecasting future value unreliable. While competitive alternatives proliferate—especially in lower-cost, vertically integrated regions—these are tempered by concerns over operating dynamics and supply chain stability.
Ultimately, the chemistry sector is suffering from a combined lack of confidence in mid-term growth projections and hesitancy to embrace bold portfolio moves when the market environment itself remains so uncertain. Until demonstrable signs of stability and regulatory clarity emerge, the M&A pipeline is likely to remain constrained, even as pent-up capacity for transactions accumulates.
Navigating the Signals
In this environment, leaders in specialty chemicals and polymers should interrogate their risk assumptions and scenario plans with rigor. The most critical question now centers on when—and how—confidence can return to the deal market: what indicators of business performance, cost competitiveness, and regulatory stability will tip the balance for buyers and spark a rebound?
Executives should examine the readiness of their asset portfolios to withstand prolonged uncertainty, scrutinizing both internal cost positions and external go-to-market dynamics. With global supply chains in flux and regional pockets of opportunity diverging, it is essential to anticipate competitor moves, regulatory triggers, and shifts in channel support that may rapidly alter value propositions and strategic options. The ultimate inflection point will come when the collective urge to de-risk meets renewed, fact-based optimism about future value capture—and those best prepared will seize first-mover advantage.
What’s Next?
Breakthrough Marketing Technology empowers chemical and polymer leaders to see beyond the noise and act with clarity amid uncertainty. Our team delivers:
- Actionable intelligence on market drivers, downstream appetite, and regulatory change
- Benchmarking of competitive positions and operating models by geography and segment
- Real-time mapping of strategic alternatives and partnership pathways
Whether preparing for acquisition, divestment, or organic repositioning, we equip you with the market evidence and rigor to make confident decisions. Don’t let uncertainty dictate your strategy—turn ambiguity into advantage with a data-driven approach.
Source
Understand Your Risk. Seize Your Opportunity.
Take the Breakthrough Market Uncertainty Assessment Guide to pinpoint what’s holding your growth back, and what can accelerate it.
