Intersections

Global transportatin & logistics
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Intersections is a quarterly analysis of global merger and acquisition activity in the transportation & logistics industry. Each edition includes a review of overall deal activity for the quarter and year-to-date and a summary of large deals. Also included is a spotlight on a PwC service and a case study.

In addition to our analysis on mergers and acquisitions activity, we supplement this issue with a special report that addresses the effect of the national stimulus bill and the developments in the auto industry on the transportation and logistics sector. Included in the discussion are ways in which automotive losses translate to difficulties for T&L companies as well as their efforts for long-term restructuring.

The pace of deal activity, as measured by the number of deals announced for transportation and logistics targets, has declined significantly, with just 18 deals in first quarter 2009. Large deals (with a disclosed value of $1 billion or more) were nonexistent for the T& sector during the first quarter. This marks a huge drop from the 22 large deals announced in 2008 and 17 in 2007.

A focus on capital preservation by potential buyers contributed to this absence of large deal activity. The difficult financing environment witnessed in 2009 has caused the most well-capitalized strategic buyers to engage in smaller deals, including minority stakes, divested assets, and distressed targets. It is likely that this trend will continue, with a general lack of large deals being made in the T& sector throughout 2009 and possibly beyond.