The agrochemicals market mergers & acquisitions have a positive outlook at a global level due to the increase in different types of deals in the market like agreements, acquisitions, partnerships, mergers, etc., to cater to the increasing demand from the consumers. North America and Europe contributed a significant share to the overall agrochemicals mergers and acquisitions market, whereas Asia Pacific is projected to be the fastest-growing region. Both, developing and developed economies have a favorable market potential for agrochemicals, due to the increasing concerns regarding crop protection and pest infections.
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Market Dynamics
Drivers: Strong focus on R&D
R&D has become an integral part of the agriculture sector due to the continuously growing demand for food and decreasing arable land that demands innovative products. Stakeholders are working to develop new products that are safe for the environment and human health; currently, products are more effective and less toxic than their predecessors as most problematic ingredients are screened out early in development.
Restraints: Stringent Regulatory Framework
Three major government agencies that regulate crop protection chemicals are Environmental Protection Agency (EPA), Food & Drugs Administration (FDA), and Food Safety and Inspection Service (FSIS). The regulatory bodies have laid down stringent regulations for producing, labeling, and marketing organic products. The above-mentioned government organizations are responsible for registering the pesticides and regulating their toxicity, usage, and residue levels permitted on food; they also produce a list of banned pesticides.
Opportunities: Strategic initiatives and deals in agriculture sectors
Companies in the agrochemicals market have immense opportunities to enter into strategic agreements that would benefit both companies entering the agreement. Even strategic acquisitions can help companies grow and build a strong platform for themselves in the industry. The trend of mergers, acquisitions, and agreements is changing daily. Now, companies with different specializations and expertise collaborate by sharing their expertise and expanding their businesses together.
Challenges: Volatile energy, commodity, and raw materials prices to inflate operating costs
Fluctuations in commodity prices pose a major challenge to agrochemical companies. It can increase costs and decrease agrochemical sales, thereby affecting companies' overall revenue structure. The chemical manufacturing operations of companies use chemical intermediates for raw materials and energy, which are price volatile due to the increasing costs of oil and natural gas. Farmers are receiving substantial governmental support globally, which could mitigate the potential negative impact on fertilizer demand. Similar is the case for raw material prices for agrochemical companies.
By deal type, the agreements segment occupies the second-largest market share during the forecast period
Based on deal type, the agreements segment occupies the second-largest significant share in the agrochemicals mergers and acquisitions market. Agreements are a type of trade deal in which two or more companies come together for a specific trade, commerce, transit, or investment. Agreements helps all the stakeholders to have their standalone market share and at the same time share individual expertise to enhance the growth in the market.
By segment, the fungicides segment is estimated to occupy the second-largest market share in terms of value
By segment, the fungicides segment deal occupied the second-largest market share in the "agrochemicals mergers and acquisitions market. The need for fungicides is increasing due to rising organic farming, which gives rise to need for fungicides products. The major deals in the fungicides segments help the players to invest and innovate products that are being brought to the market.
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Europe and North America are estimated to have the largest number of deals during the study period
The increase in the number of strategic deals in Europe and North America is because of the number of players operating in the market. Most of dominating agrochemicals players are operating widely in both of these regions and they acquire companies in the Asia Pacific region. This trend is usually because of the number of arable lands and dependency on agriculture in these regions. The market size and penetration of agrochemicals like fertilizers and pesticides are expected to be high in developing regions. Further, crop protection like herbicides, fungicides, and insecticides is expected to grow, due to frequent pest attacks.
Key Players in the Market
· Bayer CropSciences (Germany)
· BASF SE (Germany)
· Syngenta AG (Switzerland)
· Corteva Agriscience (US)