Global engineering and construction M&A deals insights:

Q4 2016 update

 

Executive summary

Global Engineering and Construction M&A activity remained strong in terms of deal volume and relatively stable from a deal value perspective in 2016. The year closed 4% lower in total deal value but experienced a 23% increase in total deal volume compared to 2015 as buyers remained active with smaller “tuck-in” or niche acquisitions.

The majority of deal activity in 2016 occurred in the Construction Machinery and Materials Manufacturing categories, with notable influences from China, India, and the United States. Asia & Oceania continues to be the region with the most M&A activity by volume, accounting for 62% of acquirers and 63% of targets in global transactions this year.

Moving into 2017, continued uncertainties around the globe are likely to influence M&A activity despite a robust US economy. We see upside in the US with potential legislation around infrastructure spend and corporate tax reform increasing interest in US assets both domestically and inbound from buyers looking for growth. Globally, there continue to be a number of questions that could have significant implications. A number of these will likely start to play out in the first half of 2017; for now, we expect to see continued activity in the small to mid-size transactions and use of strategic partnerships as companies look to balance non-organic growth and risk.

engineering and construction deal value and volume
engineering and construction deal value and volume data

engineering and construction deal disclosed value

Key trends/highlights

  • Total deal value for deals with disclosed value greater than $50 million decreased by 4.5% in 2016. The E&C sector saw 305 deals in 2016, 22% higher than 2015.
  • Deal volume increased by 18% in Q4 2016, to 87 deals. This is the fourth consecutive quarter with an increase in volume, indicating a positive trend. Similar trends are seen looking at H2 2016 versus H1 2016 and H2 2016 versus H2 2015 reflecting continued robustness of M&A in the sector.
  • With 59% of total volume, strategic investors made up the majority of transaction volume in 2016.
  • Construction materials manufacturing contributed the largest share (30%) of overall deal value this year.
  • The Asia & Oceania region continues to be the most active region in deal activity by volume, accounting for 62% of acquirers and 63% of targets in global transactions.

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 Engineering and Construction M&A Deals Insights: Q4 2016 update.

Contact us

Colin McIntyre
US Engineering & Construction Deals Leader
Tel: +1 (213) 356 6029
Email

Michael Sobolewski
US Engineering & Construction Industry Leader
Tel: +1 (313) 394 3299
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Jonathan Hook
Global Engineering & Construction Deals Leader
Tel: +44 (0) 207-8044753
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