Urethane Blog
Chemical M&A to Accelerate
February 28, 2024
Chemical Sector to See Increased M&A Momentum, Brenntag’s CEO Says
Published: Feb. 27, 2024 at 10:02 a.m. ET
By Stefanie Haxel
The global chemical sector might see increased momentum in mergers and acquisitions, according to Brenntag’s chief executive officer.
The head of the German chemicals company, Christian Kohlpaintner, said in an interview with Dow Jones Newswires that dealmaking in the chemical industry seems to be accelerating, as reflected in the size of acquisitions being implemented.
“If you look at the top 50 distributors, in a short period of time, I would say in the last seven or eight years, they have increased their market share from 30% to almost 40%,” Kohlpaintner said, which he accredits to aggressive acquisitions.
Brenntag had doubled its acquisition budget in the fall of 2022 to between 400 million and 500 million euros ($434.1 million-$542.7 million) a year.
Although many players in the industry have grown significantly through acquisitions in recent years, the economies of scale aren’t enough to have a positive impact on manufacturers.
“This is the reason why, in our opinion, the consolidation of the market will occur at a higher speed and in larger steps,” Kohlpaintner said.
According to data from the Boston Consulting Group, the market for industrial chemicals is growing between 2% and 4% annually, and that for specialties is growing by 3% to 5%.
–Nina Kienle contributed to this story.
Write to Stefanie Haxel at stefanie.haxel@wsj.com
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