Is Consolidation Actually Squeezing Out Mid-Size Coatings Makers, or Hasn’t It Reached Them Yet?

Quick answer: Consolidation deal data argues against a squeeze-out, at least broadly. BCG’s November 2025 report found megadeals above $10 billion in the Coatings Industry have nearly disappeared from chemicals since mid-2023, and the top five global players still control under 5% of industry revenue. That’s a fragmenting market, not a consolidating one.

Dive Deeper: Track the Coatings Industry’s mergers & acquisition activity throughout the year all in one spot.

What Does the Deal Data Show?

BCG’s November 2025 report, authored by Jens Kengelbach and a team of BCG dealmaking specialists, tracked a specific shift: megadeals above $10 billion have “virtually disappeared” from the chemicals sector since mid-2023, and overall deal volumes sit 25% below 2017 levels. The report frames the trend as a move toward “smaller, more focused transactions” prioritizing portfolio optimization and innovation access over scale for its own sake, with private equity backing roughly one-third of the decade’s deals.

Is the Market Concentrating?

Not broadly. BCG’s own concentration figures put the top five global chemical players at less than 5% of total industry revenue, a meaningfully fragmented picture at the sector-wide level. That average hides real variation by subsector, though: agrichemicals show roughly 60% concentration among the top five players, while commodity polymers sit under 10%. BCG’s report doesn’t break out coatings specifically from the broader specialty-chemicals category, so it’s honest to say the sector-wide fragmentation is well documented while the coatings-specific slice of it isn’t broken out on its own in the data available.

Source: Deloitte’s chemical industry M&A outlook, led by Zillah Austin

Global chemicals M&A activity fell 16% in 2023 compared with 2022, the lowest level in a decade, roughly 26% below the 2015-2019 pre-pandemic average. A survey of 49 chemical executives behind the report found 86% still expected M&A activity in 2024, down from 91% the year before, with elevated financing costs and a valuation gap between buyers and sellers cited as the biggest hurdles. That’s a market where dealmaking has cooled broadly, not one where large players are on a buying spree against smaller ones.

You can track ongoing M&A activity here as the Coatings World Team regularly updates you throughout the year.

Is Big Still Getting Bigger in Coatings Specifically?

According to PPG’s own account of the deal, the industry’s largest player spent 2024 shedding a roughly $2 billion architectural coatings business rather than acquiring one, selling it to private equity firm American Industrial Partners for $550 million after describing the unit’s margins as a drag on its own results.

That’s the clearest coatings-specific counterexample, and it runs the opposite direction of the squeeze-out story: a large player getting smaller, not swallowing a mid-size rival. Set against that, Sika’s $6.2 billion acquisition of MBCC Group in the adjacent construction-chemicals and admixtures space shows selective, large-scale consolidation hasn’t disappeared entirely, it’s just concentrated in specific categories rather than spread evenly across the industry.

So Is Consolidation Squeezing Out Mid-Size Players?

The aggregate data says no, at least not as a broad, sector-wide trend. Megadeals have specifically declined, overall deal volume has fallen for two straight years by Deloitte’s count, and the sector-wide concentration figure remains low by BCG’s own measure. But averages can be true and still miss a real, localized squeeze: a mid-size formulator competing directly in a subsector where consolidation is running well above the sector average, construction chemicals looks like one candidate given Sika’s move, could be feeling pressure the aggregate numbers don’t show. The honest read is that “consolidation” isn’t one story playing out evenly across coatings; it’s several different stories depending on which subsector a given company competes in.

What Should Mid-Size Coatings Makers Actually Watch?

Headline M&A totals are the wrong thing to track here. A mid-size player is better served watching deal activity specifically within its own subsector, construction chemicals, industrial coatings, architectural, and so on, rather than sector-wide chemicals M&A figures. The private-equity-backed “focused transaction” BCG describes, a targeted bolt-on rather than a transformative megadeal, is also worth watching as the more realistic acquisition threat, or opportunity, for a mid-size company. Whether the sector’s current fragmentation holds is something mid-size coatings makers will want to watch closely in the months ahead. The picture remains a moving one.