TORONTO, May 3 /CNW/ - Merger and acquisition (M&A) activity will continue to drive the fundamental changes necessary for the near-term restructuring and long-term sustainability of the auto industry, says PricewaterhouseCoopers LLP (PwC). According to the publication Drive Value - Automotive M&A Insights, an increase in deal value was influenced heavily by the US Treasury investment in the vehicle manufacturing sector, which occurred in response to a near collapse of the automotive industry. The industry reacted by seeking infusions of capital, shedding noncore assets, renegotiating debt obligations and pursuing mergers out of necessity.
Summary findings of 2009 M&A activity include:
- Global deal value soared to US$121.9 billion, up 286% from US$31.6
billion in 2008.
- Despite the record high deal value in 2009, the total deal volume fell
to 532 transactions, representing a 3% decline from an already weak
2008 level and its lowest point since 2004.
"The current deal environment is showing positive signs and presents a number of opportunities for both strategic and financial buyers who have access to financing," says Damian Peluso, partner and Canadian automotive leader, PwC.
As the auto industry consolidates and companies continue restructuring efforts, investors who have the liquidity and access to capital are well-positioned to pursue growth through acquisitions. Automotive companies with stronger operating models and cash positions will likely leverage M&A to develop a competitive advantage.
"As we look forward, companies are likely to increase their focus on growth via the traditional drivers of M&A including driving economies of scale, acquiring technology and expanding their geographic and customer base," says Peluso. "Automotive companies seeking long-term success will drive the deal market in 2010, by developing and executing strategies for sustainable growth and value creation."
For more information and access to the full report, please visit www.pwc.com/auto or contact Kiran Chauhan, 416-947-8983, firstname.lastname@example.org.
For more information on PwC's services to the auto industry, please visit: www.pwc.com/ca/auto. For more information on PwC's Deals practice, please visit: www.pwc.com/ca/deals.
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For further information: For further information: Kiran Chauhan, (416) 947-8983, email@example.com