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Chemicals M&A – Investment Banking Review of 2020 & Outlook for 2021

29 Jan 2021

2020 was a very strange year. The impact of the COVID-19 pandemic was the major factor for the Chemical Industry but the locked down economy with fewer plane and car journeys highlighted the long-term consequences of environmental issues whilst the preparations for Brexit and a new trading relationship between the UK and European Union were hampered by the lack of clarity of the deal.

With over 2 million deaths around the world, the COVID-19 virus has inflicted personal tragedy on many communities and families, as well as being largely responsible for a major shock to the world economy.  In the first half of 2020, demand collapsed as world came to terms with the new deadly virus and ‘lockdowns’.  As people learned how to operate at a social distance and to work from home, business activity began to recover. Consequently, the final outturn for the industry was not as poor as had been feared. Despite changing consumer behaviours, disrupted supply chains and travel restrictions, the Chemical Industry’s inherent resilience has meant that many companies have come through the downturn, stronger and ready to face the challenges of 2021.

The level of mergers and acquisitions within the chemicals sector has been affected by the shocks of 2020, but deals have continued to be signed, even during the various ‘lockdowns’. Some potential deals were derailed by the new economic conditions, but others were able to continue. Natrium Capital was delighted recently to announce it has advised Solvay on the sale of its North American and European amphoteric surfactant business to OpenGate Capital, and nearly all of the sale process was undertaken in this era of homeworking, social distancing and minimal travel.

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“… over $100bn of transactions over the last twenty years”