SMALL-VOLUME M & A DEALS SUPPORT HIGHER SHAREHOLDER RETURNS

Corporates focusing on low deal volumes achieved significantly higher average annual TSR ( TSR : about 14 %) compared with corporates focusing on a high deal volume ( more than € 200M ) ( TSR : about 6 %). This also includes the power of value-unlocking , subsegment , and other divestments .

SPECIALTY-CHEMICAL CORPORATES SHOW GREATEST SHARE OF DIVESTMENTS TO PES

In terms of M & A dynamics , specialty-chemical corporates divested their assets more often to private equity ( 54 %) and to other corporates ( 51 %) compared with investments in the respective groups .

M & As IN NEW STRATEGIC AREAS SHOW HIGHEST SHAREHOLDER RETURNS

Corporates focusing on M & As in new strategic areas ( TSR : about 17 %) reached the highest average annual TSR compared with corporates focusing on portfolioenhancing M & As ( TSR : about 16 %) and divestment M & As ( TSR about 2 %).

STRING OF PEARLS APPROACH INCREASES VALUE OF M & A ACTIVITIES

Competitors pursuing a string of pearls ( high frequency and low volume ) approach show the highest average annual TSR ( TSR : about 16 %), followed by selective M & As ( TSR : about 11 %), all-in M & As ( TSR : about 8 %), and large-scale M & As ( TSR : about 5 %).

We analyzed the M & A strategies and total shareholder return ( TSR ) of a representative group of 16 corporates from the specialty-chemicals sector with :

• a cumulated revenue of more than € 190B and market capitalization of more than € 320B .

Our analysis considered :

• close to 300 ¹ deals in the period between 2015 and 2021 that had a consolidated deal value of € 162B . ²