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Materials and chemicals M&A in 2025 is a quality-over-volume story: deal counts are well below their 2021 peak, yet disclosed deal value surged 78% year-over-year as megadeals dominate and strategic buyers pay premium multiples for the right specialty assets.

Show Notes

The materials and chemicals M&A market is sending a clear signal in 2025: conviction beats volume. Drawing on data from Roland Berger, KPMG, Proventis, R.L. Hulett, NYU Stern, and McKinsey, this episode of HoldCo unpacks the valuation dynamics, deal-count trends, and buyer psychology shaping one of the more nuanced corners of the M&A landscape right now. The full analysis is sourced from this in-depth materials and chemicals M&A research piece.

Here's what the episode covers:

  • The six-turn gap: Specialty chemicals and advanced materials deals cleared at a median of 15.7× EBITDA in H1 2025 — a striking premium over the 9.4× public trading multiple — reflecting the compounded value of control, scarcity, and true strategic fit.
  • Volume vs. value divergence: Global chemicals deal counts have fallen steadily from 835 transactions in 2021 to 563 in 2024, yet disclosed deal value rose 78% year-over-year in H1 2025, as a small number of large, strategic transactions do the heavy lifting.
  • The megadeal is back — selectively: The ADNOC/OMV consolidation of Borouge, Borealis, and Nova Chemicals (cited at ~$13.4B enterprise value, ~$500M annual synergy target) illustrates the feedstock-plus-footprint logic that justifies platform-scale transactions when a buyer holds a genuine structural edge.
  • The structural multiple spread: Basic chemicals trade near 8.6× EV/EBITDA while specialty chemicals fetch 13.4×; public comps from Linde (18.5×) and Ecolab (24×+) versus BASF (9.5×) and Dow (12×) show how sub-sector positioning — not just sector membership — determines valuation.
  • Strategic vs. sponsor dynamics: Private equity pulled back to a median of 12.3× in 2025 (from 13.8× in 2024), while strategics re-engaged and paid more — 10.3× versus 8.2× the prior year — reflecting renewed willingness to compete hard when a genuinely on-strategy asset surfaces.
  • Carve-outs as PE's natural habitat: With large chemicals groups still pruning non-core positions, carve-out complexity — stranded overhead, TSAs, shared infrastructure — is creating acquisition discounts that operationally capable sponsors are positioned to capture.

The throughline across all the data is straightforward: the "buy it because capital is cheap" era is over. Buyers who are winning in 2025 have a specific, defensible reason to own every asset they pursue — and a clear value-creation thesis ready before the deal closes. For more on how deal size and strategic focus interact, listen to Why Bigger Isn't Always Better in Acquisitions.

MergersAndAcquisitions.net

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What is HOLDco?

An operator-led view of holding company work: acquiring, building and running durable, cash-producing businesses in the real economy. Deal criteria, diligence, integration, capital allocation, and the management questions that arrive the day after a close.

Each episode takes one decision — what to pay, what to fix first, when to keep the seller and when not to, how to fund the next deal — and reasons it through from an operator's chair rather than a spreadsheet. Written for people buying and running businesses, not spectating on them. Five or six minutes an episode.

Topics include deal criteria and screening, diligence that finds the real risk, deal structure and seller financing, integration priorities after close, capital allocation, management transitions, and running several businesses at once.

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