Global Automotive M&A activity was strong in the first quarter of 2018. Automotive M&A deal value is up 272% to $29.8 billion when compared to Q4 2017. Volume is up 7% to 217 deals, and the average disclosed deal size increased 383% to $445 million.
The increase in value and average deal size is primarily driven by two megadeals in Q1 2018 compared to zero in Q4 2017. The two megadeals were by Parts and Component Manufacturers accounting for $20 billion of deal value, or 66% of all disclosed deal value in the quarter.
Asia and Oceania acquirers spent $16.1 billion in Q1 2018, or 54% of disclosed deal value. The majority of deal activity were local deals. We did not see as much cross border activity as expected from the end of last quarter, and US deal announcements were relatively quiet. Given the impact of tax reform and a continued strong economy in the US, we expect US activity to pick up in the remainder of 2018. The automotive industry continues to be an attractive investment given strong unit demand for vehicles. According to PwC Autofacts, the industry is expected to grow at a 2.8% CAGR through 2024.
“Automotive activity increased in Q1 2018 as companies consider upcoming regulation changes and technology advances.”