Global aerospace and defense deals insights: Q2 2017

Executive summary

The following is an analysis of global aerospace and defense deals with disclosed values greater than $50 million. The study is based on deal announcement date.

The global aerospace and defense industry ended the first half of 2017 with $18 billion in announced transactions, 9% higher than the first half of 2016 and 14% higher than first half of 2015. Although total deal volume and value remains lower than the peak reached in 2016, the overall trend is encouraging. The current funding landscape holds great interest for the industry and its prospects in terms of transactions. The defense budget proposal far exceeds caps put in place under sequestration, and President Trump’s focus on government IT infrastructure and cybersecurity presents clear upside potential to those segments of the industry. At the same time, commercial jet order volumes exceeded expectations at the Paris Air Show in June.

These factors lead us to believe that deal volumes will continue their measured growth through the remainder of the year.

 

Key trends/highlights

  • The global A&D industry brought 26 deals for a total deal value of $18 billion in 1H 2017, 9% higher than the 1H 2016.
  • M&A activity was driven by the Aircraft & Parts category, contributing to 47% of the deal value year to date.
  • M&A activity continues to target the North American and Asia & Oceania regions. Together, the regions account for 88% of transaction targets.
  • There were three megadeals announced in Q2 2017; the acquisitions of Hyundai Heavy Industries, Daewoo Shipbuilding and Soares Ltd. This adds to the two megadeal acquisitions from last quarter – Zodiac and DigitalGlobe.
  • On average, deal activity remains primarily within country borders. Over the last three years, 85% of deal value and 74% of deal volume occurred locally.
  • Industry participants remain the main contributors to M&A transactions. Still, financial investors are showing growing interest in the sector.

"The current funding landscape holds great interest for the industry and its prospects in terms of transactions. The defense budget proposal far exceeds caps put in place under sequestration, and President Trump’s focus on government IT infrastructure and cybersecurity presents clear upside potential to those segments of the industry."

Bob Long, US Aerospace and Defense Deals Leader

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Bob Long
US Aerospace and Defense Deals Leader
Tel: +1 (703) 918 3025
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Chuck Marx
Principal, US Aerospace & Defense leader
Tel: +1 (602) 364 8161
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Scott Thompson
US Aerospace and defense leader
Tel: +1 (703) 918 1976
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Randy Starr
US Aerospace and Defense Strategy& Leader
Tel: +1 (973) 236 5682
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Dean Gilmore
US Global Aerospace & Defense Leader
Tel: +44 7970 665555
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