Strategy & Management

Expert Statement: Thomas Sul and Natale Capri, DKSH

Mergers & Acquisitions Are an Integral Strategic Component

17.05.2021 - How to Build or Maintain Critical Mass in the Chemical Distribution Industry

In the drive to reach growth objectives, or to maintain and enhance “critical mass”, mergers & acquisitions (M&A) has been a theme for the chemical distribution industry for years. The industry leaders (by size and geographic reach) were all built through a series of such transactions. As the practice is further trickling down to the smaller and mid-sized company layer of the sector, and more distributors espouse external growth options, it is worthwhile to spend some time on a reflection of recent events in this context.

Although M&A activity has been slowed down to some extent by the Covid-19 pandemic, the basic drivers are still relevant. Thus, it can be expected that industry consolidation will even be accelerated by the effects of the global lockdown that has been causing a global economic crisis, disruptions in international trade, production outages, and thus stressed supply chains.

Other factors such as the digital and ecological transformation of the chemical industry and its impact on value chains, trade conflicts, or Brexit will even increase the need to enhance critical mass and establish more widespread networks – and thus build more resilient businesses.


CHEManager asked executives and industry experts to share their views on the rationale for M&A activity in chemical distribution. We proposed to discuss the following aspects:

  • Have the key drivers for mergers & acquisitions in the chemical distribution industry changed due to the Corona crisis?
  • Will industry consolidation and thus M&A activity continue or even speed up after the Corona crisis?
  • Do you want to play an active role in the industry consolidation, and if so, what is your strategy?


Thomas Sul and Natale Capri: M&A activities in the specialty chemicals distribution industry have accelerated considerably in the past years. After a Covid-related dip in early 2020, we saw M&A activities picking up and, since last autumn, accelerate faster as both strategic and financial buyers actively pursue transactions. Specialty chemical distribution is, in fact, growing faster than chemical production and leading listed and private distributors are focused on M&A activities as a key growth driver.

“Specialty chemical distribution is, in fact,
growing fast[er] than chemical production.”

(Thomas Sul)

We expect this trend to continue as there is ample room for consolidation due to the fragmented market structure. The main reasons driving further market consolidation via M&A are regional cross-selling opportunities and an increasing need and scalability of value-added services such as regulatory compliance, advanced technical and formulation expertise, digitalization and transparent reporting.
We at DKSH are a pure specialties player with a blanket coverage of Asia and Western Europe where we serve over 30.000 customers. We have a strong presence in life science as well as in industrial chemicals and are entrusted by many of the global leading players in chemicals and ingredients. Our team is continuously scouting for M&A opportunities that are complementary to our setup.


“Leading listed and private distributors
are focused on M&A activities
as a key growth driver.”

(Natale Capri)


We don’t buy for size and will only acquire if there is a strategic fit. Over the last 10 years we have completed seven acquisitions, the last one being Axieo in Australia and New Zealand, our largest acquisition to date. Axieo was fully integrated after 7 months even during the pandemic and has been performing very well.
With a strong and healthy balance sheet and experienced management team, we are confident to further expand our organization with M&A in the future to provide even better services for our suppliers and customers through cross selling, more value-added services and innovation through our extensive network of formulation labs.

Thomas Sul and Natale Capri  Co-Heads Business Unit Performance Materials, DKSH
Thomas Sul and Natale Capri
Co-Heads Business Unit Performance Materials, DKSH