The global aerospace and defense industry continues to consolidate as investment in new defense capabilities has increased in response to rising geopolitical tensions. M&A activity has also been driven by cost reduction targets, allowing companies to integrate their processes and improve operational efficiency.
Deal value for announced transactions in Q3 2017 reached $44 billion, the highest in two years. Some of the largest transactions in A&D deal making history have been announced: United Technologies’ acquisition of Rockwell Collins is expected to transform the market for aerospace parts, while Northrop Grumman’s acquisition of Orbital ATK will allow for new technology development in defense systems.
As the US administration pushes for increased military spending, countries like China and Russia continue to channel their investments in their space capabilities. Increased demand for technology development in defense will continue to drive M&A activity.
“Deal making continues to outpace last year despite uncertainty in many areas. As opposed to past trends, this lack of clarity and the gridlock inside the beltway have not kept transactions from moving forward. A&D deal makers will continue to closely monitor geopolitical developments and tax reform, but seem intent on leveraging inorganic growth as driver for shareholder value.”
US Aerospace and Defense Deals leader
Tel: +1 (703) 918 3025