Total deal value declines to US$2.2 billion
MONTREAL, Aug. 31 /CNW/ - Merger and acquisition (M&A) deal activity in
the aerospace and defence (A&D) sector proved relatively sluggish in Q2
2010 compared to the previous quarter, according to a new
PricewaterhouseCoopers (PwC) report, Mission control: Second-quarter
2010 global aerospace and defence industry mergers and acquisitions
According to the report, the total value for announced deals in the A&D
sector in Q2 2010 dropped to US$2.2 billion, a significant decline from
the US$5 billion in total deal value from Q1 2010.
While the pace of deal activity, as measured by the volume and value of
transactions, remains above the recession lows of Q1 2009, the overall
deal market recovery took a relative pause in Q2 2010.
During Q2 2010, there were seven announced deals worth US$50 million
or more, a drop from the eight deals reported in Q1 2010.
In Q2 2010, no mega deals (transactions of US$1 billion or more) took
place, which drove average deal values downward. This represents a
decline when compared to the two mega-deals announced in the first
quarter of 2010 and full year 2009.
Despite the absence of mega-deals, the pace of activity in large and
middle-market deals is similar to Q1 2010 and 2009, however; the
majority of deals were with undisclosed values or those with disclosed
values under US$50 million.
Additionally, the absence of financial acquirers during Q2 2010
represents a departure from their relative level of activity in Q1 2010
when they accounted for 20% of deals worth US$50 million or more and in
2009 when they accounted for nearly 11% of deals.
"Looking ahead, we will likely see strategic acquirers continuing to
dominate deal-marking with intermittent increases in financial
investment," says Mario Longpré, national leader of the aerospace and
defence practice, PwC. "Improved capital markets and a recovery in the
global economy will likely help drive overall deal totals in the sector,
which makes us cautiously optimistic as we look ahead to the second half
While it's uncertain if deal activity in the A&D sector will return to
the levels seen in the first quarter of 2010, there are positive signs
the overall deal market will continue an upward climb.
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