Manufacturing the Future of Sustainability
Chemicals Industry Rebounds with M&A Momentum and Sustainability Focus
The global chemicals industry entered 2025 with renewed optimism, following a volatile 2023 and a recovery-driven 2024. According to Carleton McKenna’s 1Q25 Chemicals Report, global chemical production is projected to grow 3.5% this year, led by the Asia-Pacific region. The U.S. market remains competitive, fueled by lower energy costs and growing demand in automotive, electronics, and semiconductor sectors.
A surge in M&A activity is reshaping the sector, with over $200 billion in global chemical transactions recorded in the past year. Specialty and industrial chemicals remain hot targets, attracting both strategic buyers and private equity firms. Notable deals include ADNOC’s acquisition of Covestro and significant investments in food-grade specialty chemicals, water treatment solutions, and biotech-based agricultural inputs.
Specialty and Sustainable Chemicals Take Center Stage
The specialty chemicals sector is seeing aggressive expansion, expected to reach $940 billion in value by the end of 2025. Key growth areas include electronic chemicals, specialty polymers, and agrochemicals. At the forefront are sustainable solutions, such as biopesticides, renewable feedstocks, and energy-efficient processes, as environmental regulation and consumer demand for green products gain traction.
Private equity firms, facing high levels of dry powder, are moving into larger-scale deals to capitalize on consolidation trends. Simultaneously, advanced manufacturing technologies and smart agriculture practices are unlocking new efficiencies and product innovations.
With chemical M&A activity on the rise and sustainability shaping corporate strategy, firms that embrace digital transformation and supply chain resilience are poised for long-term growth.