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Global auto deals dry up in third quarter amid slowing economy - PwC

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(Reuters) – M&A activity in the global automotive sector plunged in the third quarter, PricewaterhouseCoopers LLP said in a report https://www.pwc.com/us/en/industries/industrial-products/library/automotive-quarterly-deals-insights.html on Thursday, citing fewer big-ticket deals.

Mergers and acquisitions around the world have sunk to three-year lows, accelerated by trade tensions and growing economic uncertainty.

The size of automotive deals in the quarter declined to $7 billion (£5.44 billion) in the quarter from $18 billion a year earlier, PwC said.

The industry’s M&A volumes tumbled to a seven-quarter low, falling 16.5% to 197 deals, according to the report.

Hyundai Motor Co’s <005380.KS> $1.6 billion joint venture with U.S.-based Aptiv Plc <APTV.N> was the biggest deal in terms of value in the quarter.

The industry deal volume has fallen by 24% to 604 deals so far this year, while the deal size has halved to $31 billion, the auditing firm said.

German auto parts maker ZF Friedrichshafen AG’s $7.4 billion deal to buy WABCO Holdings <WBC.N> in March is the biggest automotive deal so far in 2019.

Although technology was the main driver of M&A activity in the third quarter, it might not be so going forward with the sector facing leaner times, , PwC said.

“Deal makers are letting the dust settle and are focusing on the development of their previous bets,” PwC said.

However, with both strategic and financial investors remaining in a position to buy, there is reason to believe M&A could bounce back if more attractive assets become available, PwC said.

(Reporting by Ashwini Raj in Bengaluru; Editing by Maju Samuel)

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