A significant increase in merger and acquisition (M&A) volume and value in first quarter 2011 signals a positive outlook for global industrial manufacturing deal activity, according to Assembling value, the quarterly analysis of M&A activity in the global industrial manufacturing industry released today by PricewaterhouseCoopers (PwC) US.
While smaller deals and deals with undisclosed values remained the drivers of activity, the number of mega, large and middle-market deals in first quarter 2011 are on track to exceed 2010 levels, noted the PwC report.
There were 36 deals worth over $50 million and amounting to $16.6 billion during the three-month period. In contrast, during first quarter 2010 there were 14 deals totaling $2.3 billion-- an increase of 157 percent in volume and 622 percent in value.
Another key finding: Non-U.S. affiliated deals continued to dominate M&A activity (contributing nearly 70 percent) as companies looked to gain a presence in emerging and developing markets with higher growth potential.
The industrial machinery category realized the largest increase in deal volume and represented the primary driver of activity during first quarter 2011. It accounted for 56 percent of total deals worth more than $50 million, including two of the four mega deals. (The other two mega deals came from the electronic and electrical equipment sectors.) Additionally, rubber and plastic products increased in volume, comprising 19 percent of deal activity compared to 14 percent of deals in 2010.
"We expect the industrial machinery sector to continue accounting for the largest proportion of M&A deals in the coming months," said Barry Misthal, PwC's U.S. industrial manufacturing practice leader for PwC.