Global aerospace and defense deals insights: Q1 2019

Start adding items to your reading lists:
or
Save this item to:
This item has been saved to your reading list.

Executive summary

The first quarter of 2019 brought a settling in both the volume and value of A&D deal making. Value was heavily impacted by a $9.6 billion transaction in the comparative 2018 period, with volumes easing off both prior year and the ten-year average. Our view here is that this is not necessarily an indicator of any long-term downshift. Underpinnings remain solid for the industry, both from a commercial and defense perspective. The question is whether those strong fundamentals drive deal making to recapture lost traction in the quarter or become obscured by uncertainty throughout the remainder of 2019.

Key trends/highlights

  • Deal value declined by 73% to $4 billion in Q1 2019 compared to Q1 2018, 45% lower than the ten-year average in Q1 2019. Volumes fell off 14% and 10% when compared with Q1 2018 and the ten-year average.
  • Average deal size in Q1 2019 declined significantly to $139.7 million from $374.1 million in Q1 2018, largely as a result of a $9.6 billion transaction. Also, in Q1 2019 the average deal size declined by 32% when compared to the ten-year average.
  • As acquirer, Asia and Oceania maintained its dominance with a 62% share of the total deal value and a 36% share of the total deal volume in Q1 2019.

“Underpinnings remain solid for the industry, both from a commercial and defense perspective. The question is whether those strong fundamentals drive deal making to recapture lost traction in the quarter or become obscured by uncertainty throughout the remainder of 2019.”

Bob Long, US Aerospace and Defense Deals Leader

Contact us

Bob Long

Aerospace and Defense Deals Leader, PwC US

Scott Thompson

Aerospace and Defense Leader, PwC US

Follow us