The following is an analysis of global industrial manufacturing sector of deals with disclosed values greater than $50 million.
After three consecutive quarters of growth, M&A activity in the sector took a step back in Q1 17. Deal value dropped by 13% compared to Q4 16; however, this was significantly lower than the 35% decline in value seen on a global cross-sector basis over the same period. The primary reason for the tempered decline in Industrial Manufacturing is the sector showed significantly lower growth in deal value in Q4 16 when compared to global cross-sector M&A.
The largest deal was the $3.4 billion acquisition of GE Water & Process Technologies by an investor group consisting of the French water company SUEZ and the Canadian investment firm Caisse de dépôt et placement du Québec. The acquisition will expand SUEZ’s global capabilities in its Industrial Solutions business.
Despite subdued M&A activity in Q1 17 compared to Q4 16 we saw a relatively good quarter in relation to the average FY16 quarterly deal value and volume. Uncertainty around the current administration’s ability to drive its policy agenda, the sustainability of the EU after “Brexit” and forthcoming European elections, as well as the increased saber rattling between the US, North Korea, Russia, Syria, and others is likely to weigh on the minds of deal makers. Notwithstanding these headwinds, we remain cautiously optimistic regarding the M&A outlook for the remainder of 2017.
"Unanticipated geo-political and economic uncertainty coming out of the first quarter of 2017 have the potential to create formidable headwinds for deal makers for the balance 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: