New Kearney report on chemicals sector M&A suggests that strong growth is masking an uneven reality

• Four mega-deals generated 40 percent of total M&A value in global chemicals in 2025.
• Portfolio reshaping and consolidation defined chemicals M&A last year, not growth-oriented dealmaking.
• Seventy-six percent of executives cite tariffs as a headwind, pushing companies to address them through pricing, mix, and cost measures.

CHICAGO, March 4, 2026 /PRNewswire/ -- Today, global strategy and management consultancy Kearney releases the 12th edition of its Chemicals Executive M&A Report. The study reports that M&A activity in the global chemicals sector gained strength in 2025 after several slow years, with global deal value increasing 18 percent year over year. However, the reality is more selective and uneven: the rebound was shaped less by a broad-based return of confidence and more by a handful of large, strategically significant transactions.

Kearney's latest report reveals that a few major transactions dominated aggregate value in 2025, while underlying deal activity remained largely stable, instead of expanding. The top four deals—Borealis–Borouge, AkzoNobel–Axalta, OMV and ADNOC's acquisition of NOVA Chemicals, and Berkshire Hathaway's acquisition of OxyChem—accounted for 40 percent of total global M&A value last year. In contrast, non-mega-deal activity increased marginally, at 4 percent.

"M&A deals are being used to fix chemicals portfolios under pressure rather than pursue growth in a cyclical upswing," said Andrea Menegazzo, a Kearney partner and one of the report's authors. "Going forward, we expect chemicals PE returns coming less from multiple expansion and more from operational upside, especially in carve-outs."

The 2026 Chemicals Executive M&A Report includes:

Overall, portfolio reshaping and consolidation drove chemicals M&A in 2025. Europe and North America generated most of the deal value, largely due to restructuring-driven transactions and carve-outs. In North America, total M&A deal value rose 9 percent year over year to $51.5 billion, with financial-sponsor deal value rising sharply to $12 billion, and strategic deal value declining modestly to $40 billion. In Europe, total M&A deal value increased 14 percent to $38.8 billion. Financial-sponsor deal value rose to $22 billion, and strategic deal value was $17 billion.

In Asia, non-mega-deal volume continued to prevail through domestically led consolidation. Total M&A deal value in Asia increased 16 percent to $34 billion from 2024 to 2025. Financial-sponsor deal value rose to $11 billion, and strategic deal value totaled $23 billion. The rate of outbound mega-deals accelerated Middle Eastern participation, signaling renewed capital deployment by sovereign-backed sources after several relatively inactive years. The Middle East saw total M&A deal value increase markedly to $9 billion in 2025 from $3 billion in 2024, driven by strategic transactions, which comprised 98 percent of total value. Financial-sponsor deal value remained limited at 2 percent of total value ($200 million).

Outlook for 2026: M&A is not a silver bullet

Active but selective dealmaking could dominate again in 2026. Indeed, from 2023 to 2026, Kearney's chemicals M&A surveys have shown clear fragmentation in value creation. This year, pricing and mix improvement is the top value driver for up to 84 percent of our survey respondents, but manufacturing productivity, procurement efficiency, SG&A optimization, and working-capital improvement also rank highly, so there is no silver bullet.

This is a distinct shift from 2023, when cost and bottom-line synergies dominated investment rationale. Tariffs and supply-chain disruption underpin this change: up to 76 percent of executives cite tariffs as a headwind, pushing companies to address them through pricing, mix, and cost measures.

Going forward, successful acquisitions will not be defined by deal volume or financial engineering, but by the ability to execute operational change, manage complexity, and respond to region-specific dynamics with discipline. In North America, success will depend on the ability to separate, stabilize, and improve assets under structurally tighter margins. M&A winners will be those that treat mega-deals as signals and position themselves against adjacent businesses and secondary carve-outs, while they align with Middle Eastern capital's long-term agendas using disciplined execution and partnership.

For our detailed analysis and investor recommendations, read the full 2026 Chemicals Executive M&A Report here.

About the Kearney Chemicals Executive M&A Report

Now in its 12th edition, the Chemicals Executive M&A Report has been issued annually since 2014. For this edition, Kearney interviewed more than 100 leaders in the chemicals industry in Q4 2025. Analysis of additional research, carve-outs, and restructures led to proprietary advisory and forecasting on M&A deal flows in the industry.

About Kearney

For 100 years, Kearney has been a leading management consulting firm and trusted partner to three-quarters of the Fortune Global 500 and governments around the world. With a presence across more than 40 countries, our people make us who we are. We work impact-first, tackling your toughest challenges with original thinking and a commitment to making change happen together. By your side, we deliver—value, results, impact. To learn more about Kearney, please visit www.kearney.com.

Press contact: 
Meir Kahtan
Meir Kahtan Public Relations
[email protected] | +1 917-864-0800

SOURCE Kearney