Global automotive deals insights: Year-end 2017

Executive summary

Global automotive M&A activity was strong in 2017. Automotive M&A deal value is up 29.9% to $53.2 billion. Volume is up 2.6% to 598 deals, and the average disclosed deal size increased 31.9% to $278.6 million.

The increase in value and average deal size is primarily driven by two megadeals in 2017 compared to zero in 2016. The two megadeals were in Auto-Tech segment accounting for $23.3 billion of deal value, or 43.9% of all disclosed deal value in 2017.

We define Auto-Tech as investments in connectivity, autonomous, electrification, ride-sharing and the software, sensors, intellectual property and other components that support these trends. Auto-Tech deal value increased more than fivefold from $5.3 billion in 2016 to $26.7 billion in 2017, primarily due to both megadeals in 2017 being Auto-Tech related. Auto-Tech deal volume was up 28.0%, from 50 deals in 2016 to 64 deals in 2017.

US acquirers spent $23.6 billion in 2017, or 44.4% of disclosed deal value. With recent tax reform in the U.S. and the expected repatriation of cash, we expect US acquires to drive M&A activity in 2018.

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Key trends and highlights

Volume growth in 2017 was driven by the Others sub-sector while all value growth was driven by the Component Supplier sub-sector.

  • Consolidation within the aftermarket and dealership segments is racing alongside Component Supplier segment driving M&A volume. Dealerships accounted for 26.4% of the total automotive activity, and 12.7% of activity related to transactions in the aftermarket segment. Increased deal volume in the Others sub-sector was driven by aftermarket and dealer consolidation.

Value growth was driven by Component Suppliers, as deal value more than doubled to $40.7 billion in 2017.

  • Both megadeals transacted in 2017, and 60% of the top 10 deals, targeted Component Suppliers.

"Investments in connected, autonomous, and electrification made headlines and drove automotive M&A activity in 2017. Despite the risk associated with these Auto-Tech investments, this trend will continue to drive deal value in 2018."

Jeff Zaleski, US Automotive Deals Leader

Contact us

Ray Telang
Automotive Leader, PwC US
Tel: +1 (313) 394-6738
Email

Jeff Zaleski
US Automotive Deals Leader, PwC US
Tel: +1 (313) 394 3525
Email

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