This PwC publication is a quarterly analysis of global merger and acquisition (M&Amp;A) activity in the aerospace & defense (A&D) industry. In the report, you'll find an overview of M&Amp;A results, significant drivers of these results, and expectations of deal activity in future quarters.
Deal activity slowed this quarter from the robust level of 2011. The number and value of announcements with a disclosed or undisclosed value declined. While the sample of larger deals was low this quarter, several drivers from 2011 have carried over into the new year when considering all deals. Cybersecurity, unmanned systems and other defense growth areas accounted for multiple transactions. The trend of US entities driving larger deals, while non-US companies contribute a greater share of smaller/undisclosed deals was also carried over from 2011. Also, while many of the largest A&D companies are located in the US and Europe, foreign A&D demand is supporting the development of sector constituents in emerging nations. Their growing role in the global sector leads to an increased frequency with which these companies engage in new transactions at the smaller and undisclosed end of the deal value spectrum.
While the overall level of deals declined significantly this quarter, we believe that there are a multitude of potential drivers of M&Amp;A activity in 2012 that could lead to an increase in deal activity for the remainder of the year.