Global industrial manufacturing deals insights: Year-end 2019

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Executive summary

2019 was a year in which declines in deal volume—largely due to high valuations, uncertainty in trade regulations and slowing GDP growth around the world—have caused certain deal makers to reevaluate their inorganic growth strategies. Worldwide cross-sector deal value decreased 3% from 2018 to 2019, while deal volumes decreased 5% for the same period. Industrial manufacturing saw a more significant decline in deal value from 2018 to 2019 of 19%. Our first and fourth quarter deal volumes were reflective of some of the lowest quarterly activity since Q1 2014 for the sector. While overall industrial manufacturing deal value has declined, the aggregate value of the top ten deals in 2019 has remained stable at $36.3 billion compared to $38.5 billion in 2018. Further 2019 exceeded 2017 levels by more than $9.0 billion. This is a positive sign for deal makers as it demonstrates certain deal makers are still acting boldly in driving their strategic initiatives forward. Our guidance for 2020 is two- fold. Megadeals will continue to become a larger share of deal value and volumes will be flat to marginally lower than 2019 levels.


“As predicted, in 2019 megadeals remained prevalent in a slightly declining deals market, a trend we believe will continue into 2020.”

Paul Elie, US Industrial Manufacturing Deals Leader

High level trends and highlights of 2019


  • Total deal value declined by 19% from $104.1 billion of total deal value to $84.1 billion.

  • The fourth quarter of 2019 total disclosed deal value increased by 3% to $19.1 billion compared to $18.5 billion in Q3 2019 driven primarily by the $5.9 billion megadeal between Zhuhai Mingjun Investment LP and Gree Electric appliances.

  • Total deal volume declined in 2019 registering 2,374 deals compared with 2,591 deals in 2018, an 8% decline. Deal volume trended similarly in Q4 2019 with 578 deals compared to 604 deals in Q3 2019, a 4% decline.

  • Three megadeals in 2019 accounted for $20.1 billion or 24% of total deal value for the year

Deals by disclosed value and average deal size

In 2019, the average deal size declined by 11% to $87.1 million when compared to $98 million in 2018. For Q4 2019, the average deal size decreased by 8% to $74.4 million from $81 million in Q3 2019.

Financial vs. strategic investors

Strategic investors led in 2019 by contributing 55% and 60% in the total deal value and volume, respectively. Strategic investors’ lead in 2019 is attributed to the top megadeal, Ingersoll-Rand US Holdco Inc.’s acquisition by Gardner Denver Holdings Inc., worth $8.7 billion. Similarly in Q4 2019, strategic investors stayed ahead of the financial investors by contributing 53% and 60% to the deal value and volume, respectively. Even after performing better than the financial investors, strategic investors witnessed the second lowest deal value and volume in Q4 2019 since Q1 2017.

Regional analysis

In 2019, Asia and Oceania was the leader in deal value and volume in the acquirer region. In terms of deal value, the region was followed by North America, while followed by the UK and Eurozone in terms of volume. North America was the most targeted region in 2019 with 36% share in deal value, followed by Asia and Oceania with 35% share. In deal volume, Asia and Oceania led the pack with 41% share, followed by UK and Eurozone with 27% share.

Highlights of deal activity

Industrial manufacturing deals outlook

While disruptive factors like trade and lower GDP are pointing to an economic downturn, many of the positive factors we have highlighted in our previous publications continue to be prevalent. As stated in PwC’s publication Winning through M&A in the next recession, the M&A environment is cyclical and has historically followed economic downturns, as capital available for deals typically decrease. We believe an economic downturn will be unlike the last historic downturn as the fundamentals of global economies, particularly China and the United States, are much stronger, a sort of soft landing growth recession. Some deal makers will continue to practice caution while others will identify opportunities and be swift to move to capture value through M&A in 2020.

Positive factors impacting the deal-making landscape in 2020:

  • Record levels of dry powder from private equity funds and healthy corporate balance sheets indicate sufficient levels of capital to pursue acquisitions. Downturns usually see increased deal supply so there are opportunities for deal makers to strike attractive deals and create tremendous value for their organizations.

  • High valuations have been a factor for the decline in deal volume from 2018 to 2019. However, as the economic outlook declines, valuations will likely fall, which will change the supply and demand balance in favor of buyers creating M&A opportunities.

  • The prominence of megadeals is reflecting a decoupling of the megadeals segment of the M&A market from the lower-growth global economic environment. We believe that decoupling will continue and megadeals will remain prevalent.

  • Liquidity in the equity and debt markets combined with cheap lending rates will allow companies to access a favorable lending environment to finance deals.

Disruptive factors likely to create a pause in deal making in 2020:

  • The Chinese and US economies are pointing to economic slowdowns as GDP levels slump. Chinese annual growth rates for FY19 were 6-6.5% and could fall below 6% in 2020; the US economy grew 1.9-2.1% and is expected to grow at 1.8% for that same period.

  • Uncertainties as it relates to length of economic slowdowns around the globe, Brexit, impending US elections, and the continuing trade negotiations, primarily between the United States and China, remain on the minds of deal makers.

  • Global protectionism is deterring the level of cross-border deal targeting as companies are shifting their focus to regional targets.

About the data

The information presented in this report is an analysis of deals in the global industrial manufacturing industry. Deal information was sourced from Thomson Reuters and includes deals for which targets have an SIC code that falls into one of 111 industrial manufacturing industry groups. Certain adjustments have been made to the information to exclude transactions which are not specific to IM or incorporate relevant transactions that were omitted from the SIC industry codes.

This analysis includes all individual mergers, acquisitions, and divestitures for disclosed or undisclosed values, leveraged buyouts, privatizations, minority stake purchases, and acquisitions of remaining interest announced between January 1, 2017 and December 31, 2019, with a deal status of completed, partially completed, pending, pending regulatory and pending completion, and excludes all rumors and seeking buyers. Additionally, transactions that are spin-offs through distribution to existing shareholders are included.

Percentages and values are rounded to the nearest whole number which may result in minor differences when summing totals.

Contact us

Paul Elie

Industrial Products Deals Leader, PwC US

Bobby Bono

Industrial Manufacturing Leader, PwC US

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