KPMG Deal Capsule Juli 2020 - FINAL · market uncertainties and risks, however, cause life sciences M&A to take a break. — With only one deal worth USD 5 billion in Q2 2020 and

1,1179671,0621,1271,1511,133

HOT

HIGHLIGHTS— M&A activity in life sciences and chemicals remained

subdued in H1 2020 following the shutdown of global economic activity as a response to contain the COVID-19 pandemic.

— In fact, H1 2020 deal value collapsed massively year-on-year. With no blockbuster deal above USD 10 billion, Q2 2020 M&A activity fell down to a level which we have last seen during the Global Financial Crisis and its aftermath.

— By developing a potential vaccine, life sciences indisputably takes on a key role in the fi ght against COVID-19. Current market uncertainties and risks, however, cause life sciences M&A to take a break.

— With only one deal worth USD 5 billion in Q2 2020 and with a worse performance than the overall stock market, the chemical sector is hit by the full extent of the crisis. Yet, accountable for every second deal in Q2 2020, the Chinese market shows signs of recovery.

— KPMGs Deal Thermometer signals an ongoing cooldown with recovery tendencies for M&A.

DEAL THERMOMETER H1 2020KPMG’s Deal Thermometer signals the environment for M&A deals in chemicals and life sciences. It combines the appetite for deals (changes in forward P/E ratios) with the capacity to fund deals (changes in Net Debt/EBITDA multiples). ‘Hot’ signifi es an environment conducive to deal-making.

DEAL APPETITE (Forward P/E ratio)

Sources: Capital IQ; KPMG, Germany, Analysis Sources: Capital IQ; KPMG, Germany, Analysis

DEAL CAPACITY(Net Debt/EBITDA)

DEAL APPETITE (Forward P/E ratio)

DEAL CAPACITY(Net Debt/EBITDA)

30 Jun 2020

17.4 18.3

30 Jun 2021

5%

1.2x0.8x

(33%)

30 Jun 2020

30 Jun 2021

1.8x

30 Jun 2020

13.9

17.2

30 Jun 2021

24%

30 Jun 2020

1.7x

30 Jun 2021

LIFE SCIENCES CHEMICALS

7%COOL

FIGURE 1: TRENDS IN LIFE SCIENCES M&A

2014 2015 2016 2017

Sources: Thomson One; KPMG, Germany, Analysis

Number of Announced Deals Deal Value in US$ billion

(12)%

(77) %

2018

H1 2019 vs. H1 2020

FIGURE 2: TRENDS IN CHEMICALS M&A

(13) %

(82) %


Number of Announced Deals Deal Value in US$ billion

Deal CapsuleTransactions in Life Sciences & Chemicals

July 2020

2,8322,130

610

2,449

265

2,530 2,611 2,768

597

296222

467

H1 2019 H1 20202019

H1 2019 vs. H1 2020

2014 2015 2016 2017 2018 2019

104 13984100

233215

279

1,2741,451

64

With more and more countries in temporary lockdown, M&A activity in Life Sciences and Chemicals clearly fell below last year’s level in Q2 2020. Yet, market conditions could be indicative of a cautious recovery.

CHRISTIAN KLINGBEIL | PARTNER, KPMG IN GERMANY

“”

H1 2019 H1 202020

423

484

110

MODERATE

© 2020 KPMG AG Wirtschaftsprüfungsgesellschaft, a member fi rm of the KPMG network of independent member fi rms affi liated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Printed in Germany. The KPMG name and the logo and are registered trademarks of KPMG International.

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SAS, a European venture capital fi rm, for USD 2.1 billion includ-ing an upfront cash payment of USD 0.7 billion. Corvidia is specialized in research, development, and commercialization of therapies for cardio-renal diseases. With Corvidia Therapeu-tics’ lead candidate, ziltivekimab, Novo Nordisk aims to expand its footprint across cardiometabolic diseases.

In May, Alexion Pharmaceuticals Inc. announced to acquire Portola Pharmaceuticals Inc., a commercial-stage biophar-maceutical company specialized in blood-related disorders, for USD 1.4 billion. The transaction aims to diversify Alexion’s hematology, neurology and critical care portfolio through Portola’s medicine Andexxa, the only approved Factor Xa inhibitor reversal agent for stopping severe bleeding. Alexion is paying a premium of 131%, in anticipation of Andexxa sales to reach blockbuster status by 2025.

US-based Invitae Corp. announced on 22 June, to merge with ArcherDX Inc., a genomics analysis company, in a shares-plus-cash transaction including certain milestones for a total of USD 1.4 billion. The deal aims at offering a single platform of cancer testing.

The Dutch Royal DSM N.V. announced in June to acquire Erber AG, an Austrian-based animal nutrition and health company, for USD 1.1 billion, representing a transaction value of fourteen times 2020 EBITDA. The acquisition is aimed to expand DSM’s portfolio of higher value-add specialty solutions and to realize revenue synergies.

While not being amongst the top deals, on 15 June, the Ger-man government announced the acquisition of a 23% stake in CureVac AG, a German-based bio-pharmaceutical specialized in mRNA technology to treat diseases and create vaccines, for USD 0.34 billion. The direct investment follows the recently approved economic stimulus packages which includes the support of strategic sectors in Germany. On 17 June, CureVac obtained approval to move forward to human testing for their COVID-19 vaccine candidate.

OUTLOOKPrior to the crisis, life sciences deal volume was already on a slight downward trend and deal value was held up because of several large deals. While this trend has been accelerated through the recent deterioration of capital markets and real economies, there are a number of drivers which may stimulate M&A going forward, including (1) abundance of available cash (dry powder), (2) forced sell-sides or insolvencies, (3) vertical integrations to secure supply chains, (4) carve-outs of non-core asset and (5) strategic partnerships. Needless to say that only time will show the future direction of life sciences M&A. Hope-fully, we have a clearer view by the time of our next edition.

COVID-19 KEEPS M&A ON HOLDThe spread of COVID-19 caused tremendous market turbu-lences and uncertainties, which signifi cantly impacted global life sciences M&A activity in H1 2020. Relating the spread of the pandemic to deal volume, Fig. 6 shows a signifi cant shortfall in the cumulative 2020 deal volume. Especially from the beginning of March 2020 onwards, when cases started to rise exponentially and economic shutdowns were initiated, the gap to last year began to widen.

In long-term comparison, Q2 2020 deal volume (646 deals) fell slightly below the historical Q2 5-year average (690 deals) and below level of Q2 2017 (680 deals). Q2 2020 deal value was affected more severely, standing at USD 27 billion. This value refl ects a drop to a level which we have last seen in Q2 2010 (USD 30 billion).

Deal volume of top acquirer and target nations (Fig. 7) declined, on average, by 3% in H1 2020 compared to prior year, with France as the country hit hardest (-50%).

TOP DEALSOn 11 June, the Danish pharma company Novo Nordisk A/S acquired Corvidia Therapeutics Inc., a US clinical-stage bio-tech (a former AstraZeneca spin-off) from Sofi nnova Partners

Following the global spread of COVID-19, H1 2020 life sciences M&A activity fell signifi cantly below prior year with 1,274 announced trans-actions and a deal value of USD 64 billion. Thereof, Q2 2020 witnessed only 646 deals with a deal value of USD 27 billion, representing a level, which we have last seen during the aftermath of the Global Financial Crisis. However, the fundamental data is entirely different this time, with a promising outlook and hopefully a fast recovery.

LIFE SCIENCES AMIDST COVID-19: STOCK MARKETS AND VALUATIONSAs the potential key sector to contain the current pandemic, by developing a vaccine for COVID-19, the life sciences sector has outperformed global stock markets in H1 2020, which suffered from social distancing measures and a shutdown of major global economies. While the global life sciences index dropped by 22% end of March and has since then recovered to around its level at the beginning of the year, the MSCI World Index lost 32% during the same period and is still 8% below its starting level (Fig. 4).

Valuations based on EBITDA multiples of publicly listed life sciences companies reveal a similar picture (Fig. 3). In each subsector, valuations dropped in Q1 2020 but have picked up again in Q2 2020. While pharmaceuticals and medical devices and diagnostics recovered nearly to the pre-crisis level, biotechs clearly exceed the pre-crisis level, signaling its key role in the fi ght against COVID-19 from which investors seek to benefi t, such as Gilead’s clinical trial of remdesivir or Moderna’s and BioNTech’s vaccine development efforts.

Life Sciences

Note: (b) Indexed to 100 with 01.01.2020 as base dateSources: Capital IQ; KPMG, Germany, Analysis

FIGURE 3: MEDIAN PUBLIC COMPANY EBITDA MULTIPLES(a)

Note: (a) Sample size consists of 186 biotech, 505 medical devices and diagnostics, 728 pharma companies for Q2 2020; refers to 90% quantile at respective quarter-end

Sources: S&P Capital IQ; KPMG, Germany, Analysis

Looking at how the market cap of the largest players within the global life sciences index has changed in H1 2020 since early 2020 reveals a mixed picture (Fig. 5):

Eli Lilly experienced an increase in market cap, mainly due to strong sales of its blockbuster drugs. Thermo Fisher Scientifi c and Roche benefi ted from the crisis, as they developed the fi rst commercial tests for SARS-CoV-2 and antibody tests. Stockpiling tendencies further boosted toplines of various life sciences companies. On the other hand, Merck & Co., expects to lose over USD 2 billion of annual sales due to COVID-19, as most of its products are physician-administered so that sales decreased due to postponed medical appoint-ments. The drop of Pfi zer occurred prior the spread of COVID-19, after missing profi t expectations at the beginning of the year.

FIGURE 4: DEVELOPMENT OF SHARE PRICES 2020(b)

Q4 2019Q4 2018 Q2 2020Q1 2020

MSCI World Index MSCI World Pharma, Biotech & Life Sciences Index

65

90

100

70

80

95

85

75

110105

Jan MayAprMarFeb Jun


FIGURE 7: TOP COUNTRIES M&A H1 2020(d)

Sources: JHU CSSE; ECDC; Thomson One; KPMG, Germany, Analysis

FIGURE 6: RELATION BETWEEN PANDEMIC SPREAD AND DEAL VOLUME

2019 deal volume 2020 deal volume Cum . COVID-19 cases

14.06.

29.06.

01.01.

16.01.

31.01.

15.02.

01.03.

31.03.

16.03.

15.04.

15.05.

30.04.

30.05.

11.3. WHO declares pandemic

8.3. lockdown in Italy9.3. stock market crash

20.4. US oil price slumps

400

600

800

1.000

200

0

1.600

1.200

1.400

Biotech Medical devices and diagnostics

Pharmaceuticals

19.0x13.5x

23.6x 21.7x27.5x

12.0x9.8x11.5x14.6x

11.8x17.6x16.6x

FIGURE 5: CRISIS IMPACT ON MARKET CAP OF TOP 10 COMPANIES(c)

AS TARGETAS ACQUIRER

US CHINA S. KOREAJAPAN CANADA INDIAGERMANYUK ITALYFRANCE

96 89 74 7862 43 51 42 48

32 41 23 33 23 21

357383

224224

118

Note: (d) Number of announced deals

IN USD BILLION:

Merck & Co. Inc.

Pfi zer Inc.

Bristol Myers Squibb Co.

AstraZeneca plc

Johnson & Johnson

Novartis AG

Eli Lilly & Co.

Amgen Inc.

F. Hoffmann- La Roche Ltd.

Thermo Fisher Scientifi c Inc.

(16)%

(16)%

(7)%

5%

(4)%

(8)%

31

(0)%(0)

7

7% 15

11% 14

24%

(20)%(15)% (5)%(10)% 5% 10% 30%25%20%15%-

(37)

(14)

(10)

(19)

(36)

Sources: Thomson One; KPMG, Germany, AnalysisNote: (c) Change between 1 January and 30 June 2020

COVID-19 cases:10.5m



Life Sciences Chemicals

NUMBER OF TOTAL DEALS:

1,274

Und

iscl

osed

de

al v

alue

Dis

clos

ed

deal

val

ue NUMBER OF DEALS:

1,274

Sources: Thomson One; KPMG,Germany, Analysis

>US$ 500 million - 1 billionUS$ 50 - 500 million<US$ 50 million>US$ 1 billion

PharmaceuticalsMedical technology

BiotechPlant sciences

388

456422

8

DEAL VALUEIN USD BN.:

6424

31

9

0

704

570

0

12

FIGURE 8: LIFE SCIENCES ANNOUNCED DEALS BY SIZE OF TRANSACTION H1 2020

513

169

Notes: (e) All numbers are in USD billion (converted at the exchange rate on the announcement day if required) – representing Enterprise Values where available(f ) Financial investors are italicized(g) Investor group comprising of Henan Asset Management Co. Ltd., Guangzhou Xuanyuan Investment Management Co. Ltd., Xing’ao (Hengqin) Investment Management Co. Ltd. and others(h) Investor group comprising of Luo Yi and Luo Yedong

10

NUMBER OF DEALS:

704



Notes: (a) All numbers are in USD billion (converted at the exchange rate on the announcement day if required) – representing Enterprise Values where available(b) Financial investors are italicized(c) Investor Group comprising of IDG Capital, CPE Capital Pty. Ltd., China Renaissance New Economy Fund, TI-capital and others

The deal value of the global top 10 announced deals in H1 2020 wasUS$ 26.7 billion

The deal value of the global top 10 announced deals in H1 2020 was

TABLE 1: GLOBAL TOP DEALS ANNOUNCED IN H1 2020(b)

US$ 13.4 billion

FIGURE 9: LIFE SCIENCES ANNOUNCED DEALS BY CATEGORY H1 2020(d)

Note: (i) Includes all deals with a disclosed and undisclosed deal value

FIGURE 10: CHEMICALS ANNOUNCED DEALS BY SIZE OF TRANSACTION H1 2020 FIGURE 11: CHEMICALS ANNOUNCED DEALS BY CATEGORY H1 2020(i)

Sources: Thomson One; KPMG, Germany, Analysis Sources: Thomson One; KPMG, Germany, Analysis

Bidder Target Therapy AreaDate of Announcement Deal Status

Total Value(a)

Thermo Fisher Scientifi c Inc. Qiagen N.V. Molecular diagnostics solutions 3 Mar 2020 Pending 11.5

Gilead Sciences Inc. Forty Seven Inc. Immuno-oncology 2 Mar 2020 Completed 4.9

Novo Nordisk A/S Corvidia Therapeutics Inc. Cardio-renal diseases 11 Jun 2020 Pending 2.1

Alexion Pharmaceuticals Inc. Portola Pharmaceuticals Inc. Therapeutics for thrombosis and

other hematologic 5 May 2020 Pending 1.4

Invitae Corp. ArcherDX Inc. Genomic analysis for oncology 22 Jun 2020 Pending 1.4

Partners Group Holdings AG Healius Ltd. Diagnostic services 25 Feb 2020 Withdrawn 1.2

Royal DSM N.V. Erber AG Animal nutrition 12 Jun 2020 Pending 1.1

Eli Lilly and Co. Dermira Inc. Chronic skin conditions 10 Jan 2020 Completed 1.1

Alibaba Health Information Technology Ltd. Ali JK ZNS Ltd. Pharmaceutical e-commerce 6 Feb 2020 Pending 1.0

Investor Group(c) MGI Tech Co. Ltd. DNA sequencing instruments and reagents 28 May 2020 Completed 1.0


Bidder Target Business AreaDate of Announcement Deal Status

Total Value(e)

INEOS Group Holdings S.A.

BP plc – Global Aromatics and Acetyls Business Petrochemicals 29 Jun 2020 Pending 5.0

OMV AG Borealis AG Basic chemicals 6 Mar 2020 Pending 4.7

Qatar Petroleum Corp. Qatar Fertilizer Co. P.S.C. Agricultural chemicals 8 Mar 2020 Pending 1.0

Investor Group(g) Lomon Billions Group Co. Ltd. Titanium dioxide pigments 23 Apr 2020 Pending 0.6

Qinghai Huixin Asset Management Co. Ltd.

Qinghai Salt Lake

Industry Co. Ltd. – assetsAgricultural chemicals 17 Jan 2020 Pending 0.4

Investor Group(h) Hoshine Silicon Industry Co. Ltd Silicon-based materials 18 May 2020 Pending 0.4

Yangquan Coal Chemical Group

Yangmei Fengxi Fertilizer Industry Group Co. Ltd. Fertilizer 11 Jun 2020 Pending 0.4

Huntsman Corp. CVC Thermoset Specialties Inc. Specialty chemicals 16 Mar 2020 Completed 0.3

Liaoning Bora Enter-prises Group Co. Ltd.

Liaoning Bora Chemical Co. Ltd. Petrochemicals 21 May 2020 Completed 0.3

DuBois Chemicals Inc.CIMCOOL Fluid Technology LLC (subsidiary of Hillenbrand Inc.)

Metalworks fl uids 20 Mar 2020 Completed 0.3

TABLE 2: GLOBAL TOP DEALS ANNOUNCED IN H1 2020(f)

Note: (d) Includes all deals with a disclosed and undisclosed deal valueSources: Thomson One; KPMG, Germany, Analysis

DEAL VALUE IN USD BN.:

20

NUMBER OF DEALS:

423

101

6

64

142

26

94

121

1NUMBER OF DEALS:

214

3

163

NUMBER OF TOTAL DEALS:

423

Und

iscl

osed

de

al v

alue

Dis

clos

ed

deal

val

ue214

209

>US$ 500 million - 1 billionUS$ 50 - 500 million<US$ 50 million>US$ 1 billion

Rubber and plastics productsPaints, varnishes and lacquers

Industrial organic and inorgangic chemicalsAgricultural chemicals

Other

33

1

47




In H1 2020, the chemical sector witnessed substantial slowdown in M&A activity impacted by the global shutdown related to the COVID-19 outbreak. For H1 2020, deal volume stood at 423 deals and deal value at USD 19.6 billion, refl ecting a decline of 13% and 51% (excluding the SABIC deal), respectively, compared to H1 2019. With 197 deals totaling USD 10 billion, Q2 stagnated at previous quarter’s levels. As one of the fi rst countries to revive its economy, China dominated the M&A activity in Q2, making up 45% of total deal volume with domestic deals.

CHEMICAL MARKETS DURING COVID-19

Like other industries, chemicals was also impacted by the COVID-19 outbreak as the key chemicals markets – China, the US and Germany – remained impaired for the major part of H1 2020. Consequently, chemical markets performed worse than the overall stock market (Fig. 12). The global MSCI Chemi-cal Index slumped by 35% in Q1 2020, however, it regained ground in Q2 2020 by gaining 25% till June 2020. A similar decline was also witnessed for MSCI World Index, which plummeted by 32% during Q1 2020 and as of June 2020 remains 8% short of its January 2020 level.

The deal volume of top acquirer and target nations (Fig. 13) declined by an average of 6% in H1 2020 as compared to H1 2019. Amongst the top nations, Germany witnessed the larg-est decline (36%), followed by the UK with a decline of 17% in deal volume as compared to H1 2019. In H1 2020, Italy,

Sources: Thomson One; KPMG, Germany, AnalysisNote: (b) Number of announced deals (domestic and cross border)

FIGURE 13: TOP COUNTRIES IN CHEMICAL M&A H1 2020(b)

Russia and Spain were the new entrants to the top nations list as compared to prior year.

The spread of COVID-19 caused tremendous market turbu-lences and uncertainties, which signifi cantly impacted global chemicals M&A activity in H1 2020. Relating the spread of the pandemic to deal volume, Fig. 14 reveals a signifi cant shortfall in the cumulative 2020 deal volume, especially from mid-April 2020 onwards, when the US oil price slumped and economic shutdowns began to have an impact.

In the long-term comparison, Q2 2020 deal volume (197) fell about one third below the historical Q2 10-year average (275 deals), a quarter below the level during the Global Financial Crisis in 2009 (263) and even below the level which we have last seen during the EU debt crisis with 219 announced deals in Q2 2013. The same applies to deal value standing at USD 10 billion in Q2 2020, which dropped by nearly two thirds below the historical H1 10-year average (USD 28 billion).

AS TARGETAS ACQUIRER

S. KOREA UKGERMANYJAPAN INDIAUS ITALYCHINA SPAINRUSSIA

Chemicals COVID-19 IMPACTS VALUATION LEVELSSimilarly, uncertainties are refl ected in multiples of publicly listed chemical companies, which show slight recovery ten-dencies, yet still mostly below Q4 2019 levels.

STRATEGIC SHIFT: CRUDE-OIL-TOCHEMICALSDespite turbulent times of economic shutdowns and a related crude oil price collapse in April followed by recent recovery tendencies, in June 2020, Saudi Arabian Oil Co. (Aramco) published the completion of its 70% stake acquisition in Saudi Basic Industries Corp. (SABIC). Aramco bought it from Public Investment Fund, the sovereign wealth fund of Saudi Arabia, for USD 69.1 billion. Through this deal Aramco intends to accelerate its downstream strategy by expanding its integrated refi ning and petrochemicals capacity to benefi t from expected growing demand in petrochemicals.

Aramco’s deal rationale is in line with the general market trend to shift to crude-oil-to-chemicals (COTC) technology, which was fi rst practiced by ExxonMobile in Singapore in 2014 and which allows the direct conversion into high-value chemicals such as paraxylene or olefi ns instead of traditional transpor-tation fuels so that, by reducing production costs and im-proved facility effi ciency, profi tability from a barrel of crude oil exceeds 40%. Besides already operating plants in China and Brunei with a total annual refi nery capacity of 46 million tons, further projects are planned in China to expand the annual capacity by 51 million tons.

As a consequence of the SABIC acquisition, Aramco became Clariant AG’s majority shareholder. Yet, current rumours have been circulating that the Swiss specialty chemicals company is negotiating with a merger partner so that Aramco’s stake could be diluted.

TOP DEALSWith the acquisition of BP’s global aromatics and acetyls busi-ness, Q2 2020 yielded one large top deal based in UK: On 29 June, BP plc announced to divest its petrochemical business to INEOS Group Holdings S.A. for USD 5 billion, of which USD 1 billion are deferred payable no later than June 2021. In this way, BP brought forward its divestment plans as a reply to the corona-induced oil price slump to strengthen its balance sheet.

Further new top deals, even though all below USD 1 billion, all relate to China, as the country started operating back to normal post virus-related restrictions, in April 2020.

In addition to the COTC deals, Jinzhou Tengrui Investment Co. Ltd., an investment arm of Jinzhou Port Co. Ltd., sold its 30.7% stake in Liaoning Bora Chemical Co. Ltd., a petrochem-ical company engaged in coal tar, methanol, chemical light oil and other chemical materials, to Liaoning Bora Enterprise Group Co. Ltd. for USD 0.3 billion, which raised its interest to 92.3% through this step-up acquisition.

In April 2020, China-based Lomon Billions Group Co. Ltd., a global manufacturer of titanium dioxide pigments, announced private placement of shares to a consortium of investors including Henan Asset Management, Xu Gang and Guang-zhou Xuanyuan Investment Management and among others in all cash transaction of USD 0.6 billion. Lomon Billions Group intends to use the proceeds from the sale to fund its other projects and boost the working capital.

In May 2020, Hoshine Silicon Industry Co. Ltd., a China-based manufacturer of silicon-based materials, announced private placement of shares to existing investors Luo Yi and Luo Yedong in an all cash transaction valued at USD 0.4 billion. Hoshine Silicon Industry intends to supplement its working capital through the proceeds from sale.

OUTLOOKAs outlined in this and last quarter’s issue, the chemical sector was hit by the full extent of the crisis, especially in Q2 2020. Yet, with China pioneering to catch up on postponed deals and the pursuit of trends such as crude-oil-to-chemicals, the fi rst steps of recovery are visible. Though it still remains unclear how long the road to recovery will be.

FIGURE 14: RELATION BETWEEN PANDEMIC SPREAD AND DEAL VOLUME

Sources: JHU CSSE; ECDC; Thomson One; KPMG, Germany, Analysis

Sources: Capital IQ; KPMG, Germany, AnalysisNote: (a) Indexed to 100 with 01.01.2020 as base date

MSCI World Index MSCI World IM I/Chemical Index

Sources: S&P Capital IQ; KPMG, Germany, Analysis

Note: (c) Sample size consists of 2 agricultural, 8 industrial (in)organic, 129 rubber and plastic products and 86 other chemical companies for Q2 2020; except for agriculture, refers to 90% quantile at respective quarter-end

(d) Other includes paints, varnishes and lacquers

Agricultural chemiclas

Industrial (in)organic chemicals

Rubber andplastic products

Q4 2019Q4 2018 Q2 2020Q1 2020

FIGURE 15: MEDIAN PUBLIC COMPANY EBITDA MULTIPLES(c)

Other(d)

0

100

200

300

400

500

600

2019 deal volume 2020 deal volume Cum . COVID-19 cases

14.06.

29.06.

01.01.

16.01.

31.01.

15.02.

01.03.

31.03.

16.03.

15.04.

15.05.

30.04.

30.05.

11.3. WHO declares pandemic

8.3. lockdown in Italy9.3. stock market crash

20.4. US oil price slumps

200

300

400

500

100

0

600

FIGURE 12: DEVELOPMENT OF CHEMICAL SHARE PRICES 2020(a)

65

90

100

70

80

95

85

75

110105

Jan AprMarFeb JunMay

141142

6171

999142321

118 106121224232225

10.7x6.0x 5.3x 5.5x

11.2x11.7x4.3x

7.8x6.9x8.6x7.8x 9.7x8.6x11.1x11.5x

29.0x

COVID-19 cases:10.5m



BASIS OF DATA PREPARATION

Values and volumes used throughout the report are based on announcement date as provided by Thomson Reuters’ database Thomson One as of 30 June 2020, extracted up to and including 1 July 2020, and supplemented by additional independent research. Data available after publication date is incorporated in subsequent editions and thus can deviate from previous editions. This edition presents revised data for the years 2013 to 2016. This report includes disclosed and undisclosed values for M&A transactions including minor-ity stake purchases, acquisitions of remaining interest, and recapitalizations and it explicitly excludes self-tenders and spinoffs. Deviations from totals are due to rounding differ-ences. The published numbers of deals and deal values are based on the analysis of target companies which operate in the following subsectors:

Life Sciences

— Medicinal chemicals & botanical products

— Pharmaceutical preparations

— In vitro and in vivo diagnostic substances

— Biotechnology – biological products, except diagnostic substances

— Pharmaceutical wholesale

— Medical devices and diagnostics

— Plant sciences

Chemicals

— Clay, kaolin, ceramic & refractory minerals

— Chemical and non-metallic mineral mining, except fuels

— Fertilizers and agricultural chemicals

— Industrial gases

— Specialty chemicals

— Chemical wholesale

— Plastics and rubber components

KPMG’s Deal Thermometer is based on financial data as provided by S&P Capital IQ of public companies in the same sector as noted above with a market capitalization at quarter end of at least a USD 1 billion. For the life sciences sector, this comprises 305 public companies. For the chemical sec-tor, this comprises 188 public companies.

Sources

— Thomson One (Thomson Reuters)

— S&P Capital IQ

— Various companies’ press releases

— Johns Hopkins University

— European Centre for Disease Prevention and Control

Imprint

PublisherKPMG AG Wirtschaftsprüfungsgesellschaft Ganghoferstraße 29 80339 Munich Germany

Contact Christian Klingbeil(a) Partner, Deal Advisory Valuation T +49 89 9282-1284 [email protected]

Note: (a) Responsible according to German Law (§ 7 (2) BerlinerPresseG): Christian Klingbeil

www.kpmg.de

www.kpmg.de/socialmedia

The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. Our services are provided subject to our verification whether a provision of the specific services is permissible in the individual case.

© 2020 KPMG AG Wirtschaftsprüfungsgesellschaft, a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Printed in Germany. The KPMG name and the logo are registered trademarks of KPMG International.

Christian Specht Partner, Deal Advisory – M&A T +49 69 9587-2240 [email protected]

Authors

Alexander Awan Senior Manager, Deal Advisory, KPMG in Germany

Daniel JagarSenior Manager, Deal Advisory, KPMG in Germany

Dr. Daniela RuschakSenior Associate, Deal Advisory, KPMG in Germany

Documents

KPMG Deal Capsule Juli 2020 - FINAL · market uncertainties and risks, however, cause life sciences M&A to take a break. — With only one deal worth USD 5 billion in Q2 2020 and