PwC Report: Automotive M&A Activity Declines, Europe on Upswing

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Mergers and acquisitions in the automotive sector declined for the second straight year, dropping 5 percent to 465 deals in 2013, says a new report from PricewaterhouseCoopers LLP, which operates a practice in Detroit.

Additionally, the total value of deals was approximately $22 billion, down 28 percent from $30 billion in 2012.

“The slowing growth in developing markets, most notably China and Brazil, coupled with uncertainty around the European recovery, has caused market participants over the last couple of years to think twice before investing in these markets,” says Paul Elie, a spokesman for PwC.

While Asia transacted the largest volume and value of outbound deals in 2013, Europe was the most active region in automotive M&A, having transacted 165 local and 22 cross-border deals. With Europe showing signs of growth in North America and the Asia-Pacific regions, as well as improved consumer and business confidence, PwC officials are forecasting a positive outlook.

“The performance of the sector over the past five years has been strong,” Elie says. “Automotive companies with strong balance sheets will continue to look for strategic investments that provide them with the opportunity to improve or expand their technological, customer, or geographic presence.”

To read the full report, Driving Value: 2014 Automotive M&A Insights, visit pwc.com/auto.

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