The pursuit of competitors, growing demand for new tech capabilities and a heightened focus on investing in core businesses translated into many noteworthy deals in early 2019 and suggest similar activity in the months ahead. Companies in several sectors continued to make big moves to increase scale, while others used smaller – but still significant – transactions to explore new markets or ways to connect with customers.
The economy is front of mind for many companies across industries, presenting something of a mixed bag for M&A. The current cycle remains steady, and the availability of capital – cash and affordable financing – has enabled some acquirers to take action, including megadeals of at least $5 billion in value. But concerns about a downturn in the next year or two may have muted some aspirations, especially in cases of high valuations.
Other developments are influencing deal decisions in certain sectors. Executive turnover at some companies seems to have fed recent motivation for M&A. Tariffs and trade issues are leading automakers to consider strategic alliances instead of acquisitions as a way to share the cost of some investments.
As they navigate factors specific to their industries, businesses in general likely will continue eyeballing the economy. If it ends up tightening sooner rather than later, caution will be in the cards. But a dip in valuations combined with the continued access to cash and financing could allow some acquirers to capitalize and position themselves for the next positive cycle.
For more details on Q1 2019 deals activity, including individual sector reports, be sure to visit PwC Deals Industry Insights on April 25.