Global automotive mergers and acquisitions up 14% in first half of 2017

Global automotive mergers and acquisitions (M&A) activity increased 14.3% in value during the first half of 2017 to US$ 24.4 billion, according to a report by PricewaterhouseCoopers (PwC). 

The professional services network headquartered in London said operations volume went up 7.4% to 276 deals and the average disclosed deal size increased 7.9% to US$ 274.1 million.

The increase in value and average deal size is primarily driven by fewer yet larger megadeals (five deals in 2017) compared with the first half of 2016 (six deals). Megadeals accounted for US$ 17.1 billion of deal value in the first half of 2017, up 47.2%.

Component supplier M&A activity saw the most growth, with volume up 16.5% and value up over 100%. This is driven by increases in technology related, or auto-tech, transactions. There were 15 auto-tech transactions in 2017 versus three in the same period last year. 

Samsung Electronics’ US$ 8.0 billion acquisition of Harman Industries, a deal that included manufacturing operations in Mexico, is one example of auto-tech and connected car investments. 

This trend is further supported by recent announcements from Continental AG and Intel around acquisitions in the connected and autonomous car markets. 

Asian companies went on a buying spree in the first half of 2017. Twelve of the top 20 deals involved Asian buyers. Globally, Asian companies spent US$ 19.5 billion on automotive transactions, accounting for 79.9% of the total deal value.

Financial buyers continue to find the automotive industry attractive, spending US$ 7.0 billion on automotive M&A in the first half of 2017, reveals the report.

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