Deal activity in the Transportation and Logistics sector slowed dramatically
in the first half of 2009, according to PwC

Global deal activity in 2009 on pace to be 67% lower than 2008 levels

TORONTO, Sept. 17 /CNW/ - The economic downturn continues to negatively impact deal activity and deal value, according to a new PricewaterhouseCoopers (PwC) LLP report, Intersections: Second-quarter 2009 global transportation and logistics mergers and acquisitions analysis. Indeed, deal activity in the transportation and logistics (T&L) sector during the first half of 2009 is significantly off the high pace of activity of 2007 and 2008.

     -  Deal volume was down 45% in the second quarter of 2009, compared to
        the prior quarter, and overall deal value dropped 55% over the same
        time period.
     -  At the current rate, the 31 deals announced in 2009 with a value of
        US$4.5 billion places 2009 M&A activity for the sector on a
        trajectory to be 67% below that of 2008 when 189 deals were announced
        with a value of US$96 billion.

While global deal activity reflects the current negative state of the economy, the importance of BRIC countries (Brazil, Russia, India and China), particularly China and Russia, to the T&L deal market is increasing. During the first half of 2009, BRIC acquirers and targets accounted for 20% and 26% of the deals in the sector, respectively. This is up from 15% and 18% in 2008. Additionally, Asia and Oceania accounted for the majority of deal activity for deals greater than US$50 million at 39%, and accounted for approximately one-third of deal value for deals greater than US$50 million.

"It is not surprising that the global volumes and value of deal activity in the transportation and logistic sector has dropped in the first half of 2009 as compared to 2008, given the current state of the economy and difficult access to capital," said Todd Thornton, Canadian T&L sector leader at PwC in Canada. "However, globally the BRIC nations continue to show promise and we anticipate that Russia and China - particularly China - will continue to drive activity in the sector in terms of deal volume and deal value."

"In North America, we expect M&A activity in this sector to increase as shipping volumes and rates stabilize, providing acquirers with more comfort of a sustained recovery," says Eric Castonguay, Canadian corporate finance leader for the T&L sector. "US retail sales in August rose by 2.7%, which was the highest monthly increase in three years. However, most of the gain was driven by the "cash for clunkers" stimulus program and gains in the clothing, electronics and general merchandise sectors were a more modest 0.6%."

Castonguay continues, "Further supply side adjustments through the exit of weaker participants and reduced fleet volumes will be necessary to stabilize rates and increase the financial health of the sector, particularly in the truckload segment."

Globally, interest in transportation and logistics targets has shifted among modes during 2009 compared with 2008. In particular, the relative interest in passenger air and trucking targets has increased significantly. Passenger air targets accounted for 30% of all deals in the first half of the year, up from 17% in 2008. Trucking targets also saw an increase, rising to 12% in the first half of the year from only 5% in 2008. Interest in passenger ground targets saw a marked decline, accounting for only 13% of targets in the first half of the year compared to nearly one-quarter (23%) of targets in all of 2008.

Globally, financial investors are following the trend of the overall economy and engaging in fewer deals in 2009. In 2008, financial investors were involved in 35% of the deals, compared to only 16% of the deals through the first half of 2009. A similar trend was seen in Canada this past quarter.

"Two interesting trends we are seeing in this sector include an increase in the number of distressed deals as well as a lack of initiative from the financial investors," said Klaus-Dieter Ruske, global transportation and logistics leader for PwC. "Based on data we have seen during the second quarter, a number of the passenger air deals were done out of necessity, so we expect more of these distressed deals to occur in the future. Additionally, financial investors, traditionally much more involved in deals in this sector, also are shying away from deal engagement."

Acquirers and targets in the Asia & Oceania and UK & Eurozone regions accounted for the majority of deal activity as measured by both the number of deals and deal value announced during the first half of 2009. The Asia & Oceania region accounted for 39% of all deals and approximately one-third of deal value in the first half of 2009 while the UK & Eurozone region accounted for one-fourth of deal volume and one-third of deal value. Over this same period, the contribution of US entities to overall transportation and logistics deal activity also slowed, with U.S. entities involved in approximately 10% of deals announced so far in 2009, compared with 29% in 2007 and 20% in 2008.

For information on Intersections and to access the full report, including a special section on China, visit:

About PricewaterhouseCoopers Global Transportation and Logistics Practice

PricewaterhouseCoopers' Transportation and Logistics practice is composed of a global network of more than 4,200 industry professionals who provide assurance, tax, and advisory services to public and private transportation and logistics companies around the world. We bring experience, international industry best practices, and a wealth of specialized resources to help solve business issues.

About PricewaterhouseCoopers LLP

PricewaterhouseCoopers ( provides industry-focused assurance, tax and advisory services to build public trust and enhance value for its clients and their stakeholders. More than 155,000 people in 153 countries across our network share their thinking, experience and solutions to develop fresh perspectives and practical advice. In Canada, PricewaterhouseCoopers LLP ( and its related entities have more than 5,200 partners and staff in offices across the country.

"PricewaterhouseCoopers" refers to PricewaterhouseCoopers LLP, an Ontario limited liability partnership, or, as the context requires, the PricewaterhouseCoopers global network or other member firms of the network, each of which is a separate and independent legal entity.


For further information: For further information: Kiran Chauhan, (416) 947-8983,; Carolyn Forest, (416) 814-5730,

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