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Industrial Manufacturing, as well as shipping, is moving towards Asia where efficient and increasingly competent producers can compete with European and American factories. Lately we have seen a repatriation of manufacturing with automation of industry processes.

With China now being the world’s biggest ship builder, the ships equipment industry is consolidating in order to meet the competition from Asia. The last few years we have seen an increase in automation and robotization of European and US factories to increase quality and reduce the need for staff in labor intensive industries. Deal value first half 2016 vs. first half 2015 was $43.9 billion and $51.9 billion, respectively, a 15% period over period decline.

According to PWC there is a marked downturn in M&A deals in industrial manufacturing:
Excluding megadeals in the first half of 2016 and 2015, deal value decreased by approximately 50%. There was one megadeal with deal value of $22.7 billion in the first half of 2016 vs. one megadeal with deal value of $13.7 billion in the same period of 2015. There were three large deals in the first half of 2016 with aggregate deal value of $5.2 billion vs. eight large deals with aggregate deal value of $12.4 billion in the first half of last year.
Deal volume for the first half of 2016 saw 91 deals compared to 129 deals in the same period of 2015, a 29% decline. Q2 2016 deal value and volume was $11.5 billion and 41 deals compared to $32.4 billion and 50 deals in Q1 2016, reflecting declines of 65% and 18% in value and volume, respectively. Cross-border activity in Q2 2016 was highlighted by one large deal (UK Eurozone outbound to Asia and Oceania) with a disclosed deal value of $3.1 billion. Deal activity in Q2 2016 continues to be dominated by Trade buyers with 82% of value and 63% of volume

Source: www.pwc.com

Industrial Manufacturing as defined by CDI Global:
Industrial Manufacturing is a sector that impacts on all aspects of life. It is the branch of manufacture and trade based on the fabrication, processing or preparation of products from raw materials and commodities. This includes all foods, chemicals, textiles, machines, equipment, electronics, metals and minerals, pulp and paper, fabricated metal industry, furniture and fixtures, leather, timber, energy production, printing, publishing, stone, clay, glass, and concrete industries and transportation equipment.  The structure of this sector is as diverse as the sector itself. It ranges from small businesses to large international conglomerates.

Download the PWC industrial manufacturing M&A deals insights q2 2016

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