The global aerospace and defense industry began 2017 with increased investment interest leading to a 41% deal value increase in comparison to a year ago. Although total deal volume and value declined against the 2016 peak reached last quarter, announced deals values for Q1 17 were buoyed by the $9 billion Safran-Zodiac transaction. As industry demand rises due to greater defense spending and increased deliveries of large commercial aircraft, we expect M&A volumes to grow as 2017 progresses.
The current geopolitical landscape will also impact the industry. As the US intensifies its involvement in the Middle East and cross-continent conflicts, defense spending is expected to rise. At the same time, emerging economies are also looking to increase their defense spending. Despite global trade risks, the aerospace and defense industry is expected to benefit from the prevailing tense scenario.
"Despite a relatively soft start to the year, we are optimistic that deal activity will recover and return to prior year levels. Defense spending increases and geopolitical factors will certainly play a part in the prevalence and magnitude of deal making through the rest of 2017."
For our full report and additional information on the top 10 deals announced for the year, our regional and subsector analyses, and the outlook for this sector, please remember to download our:
Global aerospace and defense M&A deals insights: Q1 2017 update.
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