2018年-普华永道全球_Global_automotive_deals_insights_Q1_2018_6页_1mb

PwC Deals Summary: Global Automotive M&A Q1 2018

Core Content

The first quarter of 2018 marked a significant surge in global automotive M&A activity, with deal value increasing by 272% compared to Q4 2017, reaching $29.8 billion. The volume of deals also rose by 7% to 217, and the average disclosed deal size jumped 383% to $445 million. This growth was primarily attributed to two megadeals: Melrose Industries' $11 billion acquisition of GKN Plc. and Hyundai Glovis' $8.8 billion acquisition of Hyundai Mobis. These megadeals accounted for $20 billion of the total deal value, or 66% of the quarter's disclosed value.

Main Views

• Deal Value and Size:

  • Q1 2018 deal value was $30 billion, almost four times that of Q4 2017 and double the three-year historical average.
  • The average deal size increased significantly, reflecting a shift toward larger transactions.

• Megadeals:

  • The two megadeals in Q1 2018 were the primary drivers of the increase in value.
  • They were led by Parts & Components Manufacturers, which accounted for 80% of global automotive deal value in the quarter.

• Regional Activity:

  • Asia and Oceania dominated deal activity, accounting for 54% of the disclosed deal value and the largest share of deal volume.
  • Europe showed a growing share of both target and acquirer value and volume.
  • US deal announcements were relatively quiet in Q1 2018 but are expected to increase due to tax reform and a strong economy.

• Deal Geography:

  • 90% of deal value was transacted within the same country, up from the three-year average of 63%.
  • Cross-border activity was lower than expected, but it is anticipated to rise in the remainder of 2018.

• Investor Activity:

  • Strategic investors accounted for 57% of deal value and 71% of volume, indicating a continued preference for long-term value creation.
  • Financial buyers also remained active, with their share of total value and volume averaging 43% over the last two quarters, higher than the three-year average of 25%.

Key Information

• Technology and Regulation:

  • Companies are increasingly investing in mobility platforms, driven by upcoming regulation changes and technological advancements.
  • Focus areas include alternative powertrains, connected car technologies, artificial intelligence, predictive analytics, and lightweight composites.

• Top Deals in Q1 2018:

  • Melrose Industries' $11 billion hostile takeover of GKN PLC.
  • Hyundai Glovis' $8.8 billion acquisition of Hyundai Mobis.
  • Chengdu Qianfeng Electronics' $4.5 billion acquisition of Beijing Electric Vehicle Co. Ltd.

• Deal Multiples:

  • EV/EBITDA multiples increased from 8.3x in Q1 2017 to 9.8x in Q1 2018.
  • EV/Revenue multiples remained consistent at 1.0x.

• Deal Trends:

  • A decline in activity from rental and fleet management companies in the Maintenance, Repair and Other Services sector.
  • Continued consolidation opportunities in Asia, fueled by market growth and regulatory pressures.

Outlook

• The automotive industry is expected to remain a key investment area due to strong vehicle demand and technological innovation.
• PwC anticipates increased M&A activity in the remainder of 2018, particularly in alternative powertrains, connected car technologies, and lightweight materials.
• Cross-border deals are expected to gain momentum, especially in Europe and the US, despite ongoing trade discussions and tighter monetary policies.
• The US is projected to see a rise in deal activity due to tax reform benefits, while Asian buyers will remain active due to consolidation opportunities and regulatory changes.

Conclusion

Q1 2018 was a pivotal quarter for automotive M&A, with a notable increase in deal value and size. Strategic investors led the activity, but financial buyers also showed strong interest. The industry's growth trajectory and the push for technological innovation are expected to continue driving M&A activity throughout 2018.