Global aerospace and defense M&A deals insights: 

Q3 2016 update
 

Executive summary

Global aerospace and defense deal activity recovered slightly from the second quarter of 2016, with deal volumes ticking up and aggregate deal value holding steady. Areas of interest currently include identity and security services and additive manufacturing, addressing increasing opportunities and threats related to the industry’s technological advances.

While the volume for deals with disclosed value greater than $50 million regained momentum this quarter, the M&A base—or deals with disclosed value less than $50 million—continues on a decline. During the past four quarters we have seen a 38% decline in M&A volume overall.

The financial share of M&A activity has been on an upward trend. This quarter financial investors contributed 57% of deal value and 27% of deal volume, showing increasing external interest in the sector.

It would appear that uncertainty around the election, government spending and the global economy are holding activity in check. While we clearly expect volumes to recover, deal making for the remainder of 2016 may be more opportunistic in nature.

aerospace and defense deal value and volume
aerospace and defense deal value and volume data

aerospace and defense deal disclosed value

Key trends/highlights

  • M&A activity for deals with disclosed value greater than $50 million regained momentum in Q3 2016. The A&D sector had 11 deals this quarter, up 38% from Q2 2016.
  • Total deal value increased to $6.1 billion in Q3 2016, led by large investments from GE, Rolls-Royce, Advent and Bpifrance.
  • Deals with disclosed value less than $50 million continued to decline. During the past four quarters we have seen a 38% decline in M&A activity overall.
  • Interest in identity and security services and additive manufacturing is increasing.
  • Strategic investors continue to account for the majority of transactions, though the financial investor share appears to be trending upward.
  • The North American region continues to lead in transaction value and volume.
  • Over the past four quarters, the Asia & Oceania region has been responsible for 50% of acquisitions and 32% of total transaction value in the A&D sector.

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: Q3 2016 update.

Contact us

Bob Long
US Aerospace and Defense Deals Leader
Tel: +1 (703) 918 3025
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Chuck Marx
US Aerospace and Defense Leader
Tel: +1 (602) 820 7801
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Scott Thompson
US Aerospace and Defense Assurance 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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