Chemicals in Mexico M&A Movements Analysis¶
M&A Movements¶
The Mexican chemical industry value chain has seen significant strategic movements in the form of mergers, acquisitions, and corporate restructuring, particularly impacting the distribution and basic chemical production segments in 2024 and recent years. These movements are poised to influence market dynamics, competitive landscapes, and operational efficiencies across the value chain.
One notable development in the distribution and commercialization step is the agreement by Brenntag SE to acquire Química Delta, S.A. De C.V. in May 2024. Brenntag SE is a global market leader in chemical distribution with a strong presence in Mexico, offering a wide range of industrial and specialty chemicals and ingredients. Química Delta is described as a leading distributor of chemical products and base oils in Mexico, known for integrating value chains between suppliers and clients. This acquisition represents a strategic expansion for Brenntag in Latin America, specifically in the Mexican market, by integrating Química Delta's business, which had annual sales of $368 million USD in 2023. The transaction was expected to close in Q3 2024.
In the realm of distribution, another significant corporate action impacting the global and, by extension, the Mexican market, is the definitive merger agreement entered into by Univar Solutions with affiliates of Apollo Global Management, Inc. in 2023. Univar Solutions is a leading global solutions provider and chemical distributor with operations in Mexico. This merger, while involving a financial sponsor, aims to strengthen Univar Solutions' position as a principal distributor and solutions provider, which could lead to increased investment and enhanced capabilities within its Mexican operations.
Furthermore, a significant restructuring within the basic chemical production segment involves Alpek, a major producer of petrochemicals like PTA and PET in Mexico. ALFA, the parent company of Alpek, received approval from its shareholders in October 2024 to spin off its stake in Alpek into a new entity called "Controladora Alpek". This spin-off is expected to be completed in 2025. This strategic move is aimed at focusing on Alpek's core chemical business as a more independent entity, which could provide greater strategic flexibility for future investments, expansions, or operational adjustments in the basic chemical and related segments of the value chain.
These major M&A and restructuring activities highlight a dynamic period for the Mexican chemical industry, with key players repositioning themselves to enhance market share, expand service offerings, and potentially improve operational focus and efficiency within their respective segments of the value chain.
Impact of Major M&A Movements on the Value Chain¶
| M&A Movement | Value Chain Step(s) Impacted | Description of Impact on the Value Chain |
|---|---|---|
| Brenntag SE acquires Química Delta | Distribution & Commercialisation | Consolidation and Market Share: Increases market concentration in the chemical distribution segment, potentially making Brenntag a larger player. Expanded Service Offering: Integrates Química Delta's expertise (e.g., base oils) and customer base into Brenntag's operations, potentially offering a broader portfolio and enhanced services to end-users. Competitive Dynamics: Could intensify competition among the remaining distributors and potentially slightly shift the bargaining power between distributors and both manufacturers and diverse end-use industries. |
| Univar Solutions merger with Apollo | Distribution & Commercialisation | Strengthened Position: Aims to reinforce Univar Solutions' standing as a leading global and Mexican distributor. Potential for Increased Investment: Could lead to enhanced resources for Univar's operations in Mexico, potentially improving infrastructure, technology adoption, and service capabilities in distribution and value-added services. Competitive Landscape: May increase competitive pressure in the distribution segment as Univar potentially expands its reach and service offerings. |
| Alpek spin-off from ALFA | Basic Chemical Production, Specialty Chemical Production, Formulation & Compounding (indirectly) | Strategic Focus and Flexibility: As a standalone entity, Alpek is expected to have greater strategic autonomy to focus on and invest in its core petrochemical and chemical businesses, potentially influencing production efficiency and growth in these areas. Investment Potential: Increased independence might facilitate future investments, partnerships, or strategic alliances directly related to chemical production and related downstream activities. Market Dynamics: Changes in Alpek's operational focus or investment strategies could impact the supply, pricing, and market dynamics for basic chemicals and certain polymers and resins in Mexico. |
References¶
- Alpek. ANNUAL REPORT. https://alpek.com/storage/cms/annual-report-2023.pdf
- Brenntag. Distribución de productos químicos en Mexico. https://www.brenntag.com/en-mx/
- MarketScreener. Brenntag SE agreed to acquire Quimica Delta, S.A. De C.V. (2024-05-06). https://www.marketscreener.com/quote/stock/BRENNTAG-SE-12401448/news/Brenntag-SE-agreed-to-acquire-Quimica-Delta-S-A-De-C-V--46647410/
- Química Delta: Distribuidora de Productos Químicos en México. https://quimicadelta.com/
- Univar Solutions. Distribuidor de productos químicos e ingredientes de México. https://www.univarsolutions.com/es/locations/latin-america/mexico/