Global M&A Trends in Industrial Manufacturing & Automotive: 2021 Mid-year Update - PwC

Increased optimism creates deal-making opportunities as companies look to accelerate growth and long-term value through digital transformation.

Increased vaccination rates and the easing of COVID-19 restrictions in many countries have lifted economic forecasts and improved the outlook of CEOs in the industrial manufacturing and automotive (IM&A) sectors.1 For businesses and investors alike, the uncertainty that characterised most of 2020 appears to have been replaced with a clearer vision of future demand.

With that in mind, many companies have already reassessed their strategies and are looking to M&A to realign their portfolios accordingly to create value. The most successful among them will be those with the financial strength and strategic foresight to take advantage of deal-making opportunities and execute on structured value-creation plans.

“Recovery in the industrial manufacturing and automotive sectors will revolve around deal-making. Businesses looking for growth to put the pandemic behind them need to execute on a clear value creation plan.”

M&A trends in the first half of 2021

Global Industrial Manufacturing & Automotive industry sectors Deal Volumes and Values

IM&A deal volumes over the first half of the year varied by geography. EMEA regained its pre-pandemic position as the region with the highest deal activity, followed by Asia-Pacific and the Americas.

The highest deal values were in the Americas, primarily due to some megadeals—deals with an announced deal value of US$5bn or more. These included the announced merger of US luxury electric vehicle (EV) manufacturer Lucid Motors with Churchill Capital Corp IV (US$11.8bn); the announced merger of sensor technology company FLIR Systems by Teledyne Technologies (US$7.5bn); the announced acquisition by an investor group of pest control company Anticimex (US$7.3bn); the announced merger of UK online used car dealer Cazoo with AJAX I (US$6.4bn); and the announced merger of electric aircraft manufacturer Joby Aviation with Reinvent Technology Partners (US$5.0bn). Three of these buyers were special-purpose acquisition companies, or SPACs, highlighting how significant these acquisition structures have been in the IM&A sector during the first half of 2021.

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