The global Transportation and Logistics (T&L) sector saw its lowest volume quarter of the past 12 quarters, representing a 25% decline over the historical average combined with a 33% decline in deal value over the same period. This is likely attributable to regulatory risks, economic uncertainties and market volatility facing the sector due to changing global trade policies and tariffs.
While there were no mega deals announced during the quarter, the shipping sector led overall deal value mainly driven by the announcement of Shenzhen Chiwan Wharf Holdings acquisition of a stake in China Merchants Port Holdings (CMPH) for $4.3 billion.
Shipping and logistics continue to drive volume across the sector, accounting for more than half of the M&A deals announced this quarter.
- Eric Castonguay,
Partner, National Corporate Finance Leader
While there were no megadeals with a value greater than $5 billion announced this quarter, there were 6 transactions with a value greater than $1 billion.
Facing a weak market, the shipping industry continues to consolidate. The sector accounted for 34% of total deal value to reach $7 billion, a 25% increase over Q1 2018.
The Asia & Oceania region continues to drive M&A activity as an acquirer region and experienced a 35% increase in average deal size over Q1 2018, accounting for $13.1 billion of total deal value. Local transactions in Asia & Oceania represented approximately 52% of announced deal volume this quarter, with almost two-thirds of those deals occurring within China.
About 60% of investments came from strategic buyers as financial investors began to slow down.
Consolidation in the Shipping industry continues as companies look to cut costs and improve efficiencies while global shipping rates continue to decline. Shipping M&A activity reached $7 billion this quarter, accounting for 34% of total deal value.