Study: Strong auto supplier M&A market through 2012

Dustin Walsh

Published: September 26, 2012 6:00 am ET

Related to this story

Topics Automotive, Mergers & Acquisitions

DETROIT (Sept. 26, 11:45 a.m. ET) — Merger and acquisition activity in the automotive supply base is expected to remain heated through 2012, according to PricewaterhouseCoopers LLP’s annual study of the supply chain.

PwC predicts about 270 global auto supplier deals in 2012 with a projected total value of $16 billion — similar to the 262 deals worth $16 billion in 2006.

There were 303 global auto supplier M&A deals in 2011 but at a value of only $10 billion.

The study, “Consolidation in the Global Automotive Supply Industry 2012,” says global automotive production is predicted to rise 40 percent by 2017, creating a buyer’s market for the supply base.

European automotive suppliers remain the biggest targets for M&A activity as the continent’s economy continues to stumble, the PwC study said.

“During the last 12 months, global auto suppliers, particularly from North America and China, have been targeting European competitors, predominately in powertrain subsystems,” Dietmar Ostermann, PwC’s global automotive advisory leader, said in a statement. “Auto executives should take a harder look at how the industry will continue to change, as leading suppliers will be expected to support global (automaker) platforms and participate in China’s large and continuously growing auto market, by serving both global (joint venture automakers) and domestic Chinese automakers.”

M&A activity among powertrain suppliers leads all supplier technologies this year, representing 26 percent of all deals globally. Powertrain represents 56 percent of all deals by Chinese companies for the year to date.

Of the 350 global powertrain suppliers covered in the study, 60 are “strong buyers” and 55 “strong divestors and distressed candidates,” according to the study.

Chassis suppliers rank second in PwC’s study with 314 global suppliers, 60 of which are strong buyers and 42 strong divestors.

The study also found that North American, European, Japanese and South Korean suppliers have not returned to pre-recession capital investment — the amount a company spends on fixed or other assets for future gain. Capital investment as a percentage of sales was 4.1 percent in 2011 for PwC’s top global 100 suppliers, compared with 5.1 percent in 2008.

Comparatively, for Chinese suppliers, capital investment spending as a percentage of revenue was 7.1 percent in 2011.


Comments

Study: Strong auto supplier M&A market through 2012

Dustin Walsh

Published: September 26, 2012 6:00 am ET

Post Your Comments


Back to story


More stories

Image

Pregis Corp. to get new owner

April 22, 2014 11:44 am ET

The private equity owner of Pregis Corp. is selling off its North American operations for an undisclosed sum.    More

Auto supplier adds production space, jobs at plant in central Hungary

April 22, 2014 9:50 am ET

Automotive parts manufacturer Ábrahám Kft. has expanded its factory in Túrkéve, in central Hungary, with the launch of a new production hall as part...    More

Image

Ascend targets nylon for auto applications, opening propylene monomer unit in Texas

April 18, 2014 10:57 am ET

Materials firm Ascend Performance Materials Inc. is in full operation at its new nylon 6/6 compounding line in Florida and will break ground by the...    More

PolyQuest spins off FiberQuest unit

April 18, 2014 10:14 am ET

PolyQuest Inc. has spun off its FiberQuest unit — which distributes polyester staple fibers and cotton — as a separate company.    More

Spain's Cristian Lay Group buys two materials units of bankrupt LSB

April 17, 2014 11:11 am ET

Spanish industrial conglomerate Cristian Lay Group has purchased two of the bankrupt Spanish PET packaging group La Seda de Barcelona.    More

Market Reports

Thermoformed Packaging 2014 Market Review & Outlook – North America

This in-depth report provides analysis and discussions of economic and political conditions, market trends, legislative/regulatory activity impacting supply and demand, business opportunities and threats, materials pricing, manufacturing technology, as well as strategies being implemented by thermoformed packaging companies. In addition, there are reviews of 25 leading thermoformers in the packaging segment, assessing their growth initiatives and performance metrics over 10 years.

Learn more

Automotive Market Review and Outlook 2014 – The Americas

This 75-page report features in-depth analysis of the automotive industry for the Americas. It includes discussions of market trends, legislative/regulatory activity impacting production and threats as well as design strategies being implemented by the major automakers. Detailed charts and data tables outline North American automotive production over the last five years.

Learn more

Plastics Building & Construction Market Review and Outlook 2014 with MS Excel chart data

This report provides in-depth analysis of the plastic building and construction market for North America, including discussions of trends, opportunities, threats and the latest developments in construction trends that impact plastics processors.

Learn more

Upcoming Plastics News Events

May 6, 2014 - May 8, 2014Plastics in Medical Devices 2014

May 12, 2014 - May 12, 2014Plastics News Brazil Pharma Summit

September 10, 2014 - September 12, 2014Plastics Caps & Closures 2014

February 3, 2015 - February 7, 2015Plastics News Executive Forum 2015

More Events