South Africa’s Chemical Industry
The Chemical & Allied Industries’ Association (CAIA) reported that the chemical industry contributes in the region of 4% to the country’s GDP and 23% to total manufacturing. The Coega Development Corporation reported that South Africa’s chemical sector delivered a total revenue in excess of $35.1 billion, dominating the rest of Africa. However, local M&A activity within the industry has stalled in recent years.
2021 was stagnant compared to previous years as it witnessed the lowest number of completed M&A transactions over the past decade in South Africa.
Despite high growth rates expected in Africa and the Middle-East, as reported in the United Nations Global Chemicals Outlook II, companies across the industry have expressed growing concern in the wake of the Covid-19 Pandemic.
Local market consensus indicates that companies have had to adapt to offset losses as a result of the pandemic by improving margins and reducing fix costs. On this basis, a steady increase in deal activity is expected as companies aim to invest in profitable opportunities which complement their existing operations.
South Africa M&A Activity
Industry Breakdown by M&A Transactions in SA, 2017 - 2021
Strategic Buyers Begin to Dominate M&A Activity in SA
Public Chemical Company Comparisons Trading Multiples
