For the first time in two years both the number of global mergers and acquisitions of industrial manufacturing companies grew and the total value of those deals grew in Q4 2009.
Deal value was up 313 per cent and deal volume increased 182 per cent from October to December, according to accountants PricewaterhouseCoopers (PwC). It is the first time both value and volume was up in a single quarter since January 2007.
However, the company said there remains an absence of large deals – those worth $1bn or more. Most deals fell into the ‘small’ category – those worth less than $500m. However, with many of the world’s largest economic centres facing brighter horizons this year, Barry Misthal, US industrial manufacturing leader at PwC, said this could change this year.
“Several factors, including the absence of the financial buyer in today’s deal activity, as well as credit considerations owing to limited available credit for most of the year, contributed to the lack of large deals in 2009,” he said. “Moving into 2010, although this trend is expected to continue, deals over $500 million may increase marginally as global economic conditions improve.”
Mergers and acquisitions of aerospace and defence companies were at a ten year low last year in terms of total value, even though a near record number of deals were done.
The value of all industry deals was $10bn (£6.5bn) – a 54 per cent drop on 2008, according to PwC.
Neil Hampson, PwC’s global aerospace and defence leader, said: “As we look ahead into the new decade, small and strategic is likely to remain the name of the game in the short term but major restructuring forces are likely to be felt increasingly strongly in the long term with consequent implications for deal strategies and values.”