Study: Strong auto supplier M&A market through 2012

Dustin Walsh

Published: September 26, 2012 6:00 am ET

Related to this story

Topics Mergers & Acquisitions, Automotive

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

Impact-resistant window maker buys competitor for $111 million

July 31, 2014 3:07 pm ET

PGT Inc. is acquiring CGI Windows & Doors Holdings Inc. for $111 million as part of a plan to grow strategically by buying businesses with...    More

Buyer plans to sell former Hoover molding, assembly plants

July 31, 2014 2:06 pm ET

A former Hoover manufacturing plant with 150 injection machines in El Paso, Texas, and a nearby maquiladora plant in Juarez, Mexico, changed owners...    More

Private equity firm buys majority share of truck accessory maker

July 31, 2014 10:30 am ET

A majority share of Ann Arbor, Mich.-based truck accessory manufacturer Tectum Holdings Inc. has been acquired by Boston-based private equity firm TA ...    More

Image

Castle Harlan buys landscape erosion control firm Tensar

July 30, 2014 3:46 pm ET

Private equity group Castle Harlan inc. has acquired Atlanta-based Tensar Corp., with plans for the geosynthetic products maker and its subsidiaries...    More

Unipex Group buys Ferguson Chemical Innovation

July 29, 2014 1:57 pm ET

Chemical distributor Unipex Group Inc. announced July 29 that it had purchased Ferguson Chemical Innovation, a Brampton, Ontario-based supplier of che...    More

Market Reports

Pipe, Profile & Tubing Extrusion in North America 2014

U.S. demand for extruded plastics is expected to grow by 3 percent in 2014, with PVC remaining the largest segment.

Plastic pipe will post the strongest gains through 2018, continuing to take market share from competing materials in a range of markets.

Our latest market report provides in-depth analysis of current trends and their financial impact on the pipe, profile and tubing extrusion industry in North America.

Learn more

2014 Injection Molding Industry Report

GROWTH, OPPORTUNITY IN SIGHT FOR INJECTION MOLDERS IN 2014

In the wake of the economic turbulence earlier in this decade, molders today find themselves in much better shape. Molders are gaining a competitive advantage by investing in people, equipment and seeking inroads into new markets on a global scale.

Growth in the injection molding industry is going to be driven by low financing costs and a continued move to reshore some business.

Learn more

Shale Gas Market - Analysis of North American Region

This report highlights the impact of shale-based natural gas on the North American plastics market and features an in-depth analysis of production trends in the United States during 2013 and a forecast for 2014 and beyond.

Learn more

Upcoming Plastics News Events

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

January 14, 2015 - January 14, 2015Plastics in Automotive

February 4, 2015 - February 6, 2015Plastics News Executive Forum 2015

More Events