Global industrial manufacturing deals insights: Q1 2019

Executive summary

Q1 2019 saw a ratcheting back on the throttle of deal activity. Deal makers appeared to view the economic uncertainty around the globe as significant enough to pause and reevaluate the strategic fit of acquisitions to the overall corporate or financial sponsor strategy. After a relatively strong 2018, deal momentum subsided with Q1 deal value registering $18.4 billion, a 30% decrease from the 2018 quarterly average. That said, megadeals remained prominent representing 35% of aggregate disclose value. Deal volume registered its lowest single quarter since Q4 2014 when there were an equal 499 deals. This is largely due to geopolitical uncertainty as it relates to globe trade wars and growth slowdowns primarily in the US, Europe and China. Amid all this uncertainty, deal makers will still look to M&A to accelerate growth and drive their innovation strategy while keeping true to the fundamentals they use to evaluate economics and strategic fit.

Key trends/highlights

• Total disclosed deal value for Q1 2019 decreased from $21.5 billion in Q1 2018 to $18.4 billion in Q1 2019, a 15% decrease in deal value while value decreased from $26.5 billion, or 30% compared with Q4 2018.
• Total disclosed deal volume decreased in Q1 2019 to 499 deals, a 26% drop compared to Q1 2018 (676 deals) and a 21% drop compared to Q4 2018 (630 deals).
• The top three deals in Q1 2019 accounted for $10.2 billion of total value or 55.4%, of which the largest deal was an announced $6.2 billion acquisition.
• In Q1 2019, UK and Eurozone was the active acquirer region with deals valued at $11.5 billion, constituting 62% share in total deal value. This was the highest deal value by the region since Q2 2016. North America region followed with 19% share in total deal value.