Global automotive M&A deal value reached $59.3 billion for the year in Q3 2018 resulting in the highest year to date value in the last ten years. Deal value for the quarter came in at $18.3 billion, marking a 17% increase from Q2 2018 and a 103% increase over the same period in the prior year. Value was driven by six large (greater than $1 billion) deals announced in the quarter.
Tempering enthusiasm in Q3 2018 was the lowest recorded number of deals in the previous 12 quarters at 177 deals, down 18% from Q2 and down 6% from the same period in the prior year. Year to date volume totaled 653, down 4% from YTD Q3 2017. Lower volumes, higher values and other indicators suggest a supply problem; too many buyers chasing too few deals.
Local deals continue to dominate the landscape and despite headlines around electrification and autonomous, the biggest drivers of deals in 2018 are industry consolidation and product diversification.
Uncertainty, including rising interest rates, tariffs, trade wars, and concerns over global growth will influence deal makers in the coming quarters.
“Despite record values, Automotive M&A activity hits a speedbump in Q3 as too many buyers chase too few deals.”