MA activity

[TREND 14] Unabated M&A of 2020

MA activity

While merger and acquisition (M&A) activity was expected to decline from 2019 levels, the impact of the coronavirus in early 2020 slowed it substantially―in some cases, stalling in-process transactions. However, the second half of 2020 is seeing a robust increase in the level of M&A activity. ​

Trade tensions, geopolitical events, and slowing economies caused by the COVID-19 pandemic have had nominal effect on M&A activities in select industries, including deals in the tech space. ​

One of the most notable deals in the beauty industry in 2020 is the strategic partnership between KKR and Coty, which involved the sale of a 60% majority stake in Coty’s Professional Beauty and Retail Hair Business, including the Wella, Clairol, OPI, and ghd brands. Following L’Oréal’s recent acquisition of Thayers Natural Remedies as well as Shiseido’s and LVMH’s purchases last year of Drunk Elephant and Tatcha, respectively, the naturals personal care market has also become a hotbed for future acquisition targets. Several indies in this space, including Lola Cosmetics, Simple Organic, We Love the Planet, and Cannuka, are showing exceptional sale increases.​

The chemicals industry is seeing an increase in activity this year. While the industry experienced a slowdown in organic sales growth across most segments in all regions, many companies have taken this time to consider transactions for business transformation. The year 2020 has witnessed deals closing across the specialty chemicals sector, particularly in the ingredients value chain. Deals have ranged from EQT Partners’ acquisition of Schuelke and IFF’s acquisition of DuPont’s Nutrition and Biosciences to Cargill’s acquisition of creates further acquisitions opportunities.​

An increase in the number of deals is also seen in the agrochemicals market. In October, Syngenta Group announced the acquisition of Valagro, a leading biologicals company. This investment positions Syngenta Crop Protection as one of the key global companies poised to shape the rapidly growing biologicals market. This market is expected to nearly double in size over the next five years. Meanwhile, American Vanguard Corporation announced that its subsidiary, AMVAC Chemical Corporation, acquired the Agrinos group of companies. Agrinos is a privately owned technology leader in biological crop inputs. ​

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