Non-Subscriber Extract
2008 sees subdued M&A activity
By Guy Anderson and Matthew Smith
15 August 2008
Mergers and acquisitions (M&A) activity in the defence and aerospace sectors appeared to have declined sharply during the first seven months of 2008, Jane's research has shown, with 40 deals announced worldwide with a total disclosed value of USD8.7 billion.
This compares with 112 announced deals with a total disclosed value of USD14.9 billion during the same period of 2007, and 59 announced deals with a total announced value of USD14.06 billion during 2006. Deal activity was tracked by Jane's Mergers and Acquisitions Database Service.
The decline is consistent with Jane's view - published at the start of 2008 - that activity would come under pressure as a result of wider economic issues that put the brakes on private equity involvement in the sector and hampered debt-based deals.
For 2007 as a whole, Jane's tracked 185 deals worldwide with a total disclosed value of USD28.86 billion, and 132 deals valued at USD28.69 billion during 2006.
The US was the primary investment target during the months to 5 August, with 21 of the 40 deals announced involving a US target. This is consistent with the trend observed during 2007, when approximately two thirds of deals globally centred on the world's largest defence market.
Of the 21 US deals tracked, 11 involved both US buyers and sellers. This reflects the 'lower tier' land grab apparent during 2007 when US companies consolidated further down the supply chain.
Transatlantic deal activity on the part of Europeans seeking to strengthen their position in the dollar zone was also apparent: companies in the UK led the way with 10 deals in the North American market. This mirrored activity in 2007, and the majority of deals involved UK organisations continuing with existing strategies of transatlantic growth.