Global aerospace and defense deals insights: Q3 2017

Executive summary

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.

Key trends/highlights

  • Deal value for the first nine months of 2017 was $61.8 billion, almost three times the total deal value during the first nine months of last year.
  • There were 38 deals in the first nine months of 2017, a 15% increase from last year.
  • The average deal size in Q3 was three and half times higher than the quarterly average of $979 million due to two large transaction in particular.
  • There were three deals greater than $1 billion in Q3 2017 with an aggregate transaction value of $42.4 billion.
  • Asia and Oceania remains the most active region by volume, accounting for 54% of M&A deals this quarter.

“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.”

Bob Long, US Aerospace and Defense Deals leader

Contact us

Bob Long
US Aerospace and Defense Deals leader
Tel: +1 (703) 918 3025

Scott Thompson
US Aerospace and Defense leader
Tel: +1 (703) 918 1976

Randy Starr
US Aerospace and Defense Strategy& leader
Tel: +1 (973) 236 5682

Dean Gilmore
Global Aerospace and Defense leader
Tel: +44 7970 665555

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