Driving Value: 2012 Automotive M&A Insights April 2013 www.pwc.com/auto

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Driving Value:
2012 Automotive M&A Insights
April 2013
Welcome
It is our pleasure to provide you with the 2012 Automotive M&A Insights edition of Driving
Value, PwC’s annual review of mergers and acquisitions (M&A) activity and key trends
within the global automotive industry. This publication explores global automotive
transactions and key trends within the global automotive sector, including:
• A review of 2012 automotive deal activity among vehicle manufacturers, suppliers,
retailers, vehicle financiers, and other related sectors.
• Key trends that impacted the deal market include: the uncertainty of the outcome of the
presidential election, the fiscal cliff scenario in the US, the slowdown in economic
growth and transition power in China, and the Europe sovereign debt crisis.
• A look at the transaction activity by sector and region.
• Outlook of automotive M&A activity for 2013 and beyond continues to be constrained by
the signifcant challenges in the global macro-economic environment. However, PwC
observes signs of growth on the horizon. Key factors contributing to potential growth
are high levels of liquidity, strategic initiatives to expand business and technology
capabilities, resolution the Europe Union sovereign debt crisis, strong economic recovery
and resumption of economic growth trends in China and India.
This latest edition of the Automotive M&A Insights: Driving Value is only an introduction of
our insight and observations about the automotive industry. Our clients in the automotive
and financial sectors frequently seek our advice on potential transactions and the strategies
underpinning deals. Your feedback is important to us. We welcome the opportunity to
provide you with more information about any of the topics that require further information.
Paul G. Elie
U.S. Automotive Transaction Services Leader
+1 (313) 394 3517
[email protected]
Overview:
Recovery and growth tempered by regional challenges in Europe
The growth in automotive M&A activity witnessed during
the first half of 2011 has given way to the macroeconomic
pressures resulting in subdued M&A activity in 2012.
Overall automotive deal volume fell by 18% while deal
value declined by 33% compared to 2011. Not only did the
industry experience reduced levels of deal activity but also
witnessed a decline in the average deal size, which speaks to
a more conservative risk appetite among buyers.
While some regions show signs of continued stabilization
and profitability after the recession of 2008–2009, lingering
economic struggles in Europe, historically the most active
region in M&A activity, are taking a toll on the global
automotive deal market. Europe’s share of global deal
volumes is down for the second straight year while Asia
continues to grow its presence becoming the largest
acquirer region in 2012.
Since 2009 strategic buyers have accounted for an
increasing share of deal volume in the automotive space
compared to financial buyers. Strategic buyers are better
positioned to extract synergies from acquisitions and
currently also have the financial resources to execute deals.
As they vie for global leadership, M&A will continue to be an
important tool for growth. As the marketplace continues to
stabilize, we expect to see an increasing number of strategic
buyers executing on inorganic growth strategies.
Over the past couple of years, PwC has maintained its
positive outlook for automotive M&A. This has primarily
been driven by underlying growth expectations for global
automotive sales and assembly. The automotive sector is
expected to add nearly 30 million units globally between
2012 and 2019. Given technological changes as well as
industry fragmentation, M&A activity will continue to be
an important option. However, the economic climate has
impacted deal activity to a higher degree than initially
expected. Hence while PwC remains optimistic on the
outlook for automotive M&A, the timing for an increase
remains uncertain and clouded with Europe’s crisis and its
impact on the global automotive sector.
2012 Automotive Insights
1
Cross-Sector M&A
Global cross-sector M&A activity fared much better than the automotive sector in 2012 with deal volumes declining by 7%
and deal value declining by 17% compared to 2011.
Global cross-sector M&A deal volume and value
2000–2012
4.5
45
38.5
3.5
40
37.2
33.8
32.6
32.5
30.5
29.9
3.0
35
31.4
29.3
26.7
25.8
23.9
2.5
30
25
22.1
2.0
20
1.5
15
1.0
10
0.5
0.0
Deal volume (thousands)
Disclosed deal value ($trillion)
4.0
05
$3.72
$2.21
$1.37
$1.24
$1.62
$2.31
$3.05
$4.07
$2.90
$1.84
$1.96
$2.35
$1.95
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
594
604
Disclosed deal value
0
Deal volume (R-Axis)
Source: Thomson Reuters and other publicly available sources.
Global automotive M&A deal volume and value
2000–2012
140
700
Disclosed deal value ($billion)
120
588
580
584
594
600
$6
520
515
549
100
490
532
500
462
80
400
60
300
$70
40
200
20
100
0
$48
$19
$35
$21
$26
$41
$49
$57
$32
$46
$25
$45
$30
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
Disclosed deal value
UST Facilitated Investments
Source: Thomson Reuters and other publicly available sources.
2 PwC
Sovereign wealth investments
Deal volume (R-Axis)
0
Deal volume
621
2012 Perspective:
Automotive M&A
After a sharp spike during the first half of 2011, deal volumes
and deal values have slowed in 2012. Europe’s debt crisis
continues to weigh heavily on the European auto sector,
which in prior years has been the most active participant in
global automotive M&A. The sector transacted 490 deals with
a total disclosed value of $30.2 billion. This represents an
18% and 33% decline in deal volume and value when
compared to 2011, where a total of 594 deals were completed
for a disclosed value of $44.9 billion. The automotive space
transacted 98 deals during Q4 2012, marking the third
straight quarter of decreasing deal volume.
Overall there is increased conservatism given the looming
economic challenges in the European Union (EU) and
uncertainty in the regulatory environment. Automotive deal
value and volumes were at lower levels during 2012 than
those witnessed during the recession of 2008–2009. This
gives light to the fact that uncertainty is hurting the deal
space more than the recession itself. As soon as the
macroeconomic environment improves, we likely will see a
wave of pent-up demand resulting in increased deal activity.
Other factors in the overall decline of M&A activity included
the uncertainty of the outcome of the presidential election,
the fiscal cliff scenario in the United States (US), and the
slowdown in economic growth and transition of power
in China.
Global automotive M&A deal volume and value by quarter
Q1 2008–Q4 2012
250
25
200
161
15
139
143
150
148
141
140
126
151
139
135
125
109
150
116
109
98
113
110
10
137
5
0
100
Deal volume
Disclosed deal value ($billion)
195
20
50
$5.78 $10.27 $10.1
Q1 2008
$5.51
$19.8
Q4 2008
Disclosed deal value
$1.83 $11.85 $18.2
Q3 2009
$6.99
$4.81
Q2 2010
$7.28
$5.77
$8.44 $12.35 $8.17
Q1 2011
$15.9
$7.56
Q4 2011
$2.57 $10.85 $9.26
0
Q3 2012
Deal volume (R-Axis)
Sources: Thomson Reuters and other publicly available sources.
2012 Automotive Insights
3
Smaller deals
Global automotive M&A deals by disclosed value
2007–2012
400
350
250
7
12
7
200
$283
6
6
31
150
300
38
13
13
$234
250
58
24
35
$186
100
$161
$149
200
150
$140
100
50
50
0
194
175
135
147
176
147
2007
2008
2009
2010
2011
2012
<100 million
100 million—1 billion
>1 billion
Average deal size (R-Axis)
Sources: Thomson Reuters and other publicly available sources.
4 PwC
0
Average disclosed deal value ($billion)
Deal volume of disclosed deal value
300
Small and mid-size deals dominated the global automotive
M&A landscape. The six mega-deals (>$1 billion) transacted
in 2012 was consistent with the last few years. The low level
of mega deals being transacted relative to pre-recessionary
automotive volumes is indicative of both the risk appetite of
acquirers as well as the focus of the strategic buyers on
achieving concentration of scale and expertise in the specific
product/sectors in which they compete.
Regional analysis
Europe
North America
Historically, Europe has been the most active region in
automotive M&A in terms of both acquirers as well as
targets. However the current economic crisis and ensuing
austerity measures have significantly impacted the
automotive industry with new car demand in the EU and
European Free Trade Association (EU+EFTA) declining by
7.8% to 12.5 million units in 2012. This represented the fifth
consecutive annual decline in the region, with new car sales
stalling at 3.5 million units below its 2007 peak. These
challenges diminished the appetite and resources among
European strategic buyers. These challenges also have
heightened the risks around European assets and exposure
to the region.
Unlike Europe, North America underwent restructuring
during the 2008–2009 recession, and is now attracting
more investments. North American operations also are
churning out significant profits, providing strategic buyers
with the financial resources to execute M&A strategies.
As a result, Europe’s share of M&A activity declined for the
second straight period both as an acquiror region as well as
a target region. Asia and US, on the other hand, saw their
share of M&A activity increase.
Asia was the most active acquiror region with more than
one third of the global automotive M&A volume during
2012. This is in line with the regions’ uptick in share of
acquiror deal volume over the last three periods. A long
time second place acquiror behind Europe, as of 2012, Asia
took the lead as the global leader in acquisitions.
Contrary to volume trends, Europe accounted for the largest
acquiror region in terms of value with a 43% share in 2012,
marking the third straight period of increasing share value.
Three of the top five deals by disclosed value were
transacted by European acquirers of which two were
intra-regional deals.
The current operating environment in Europe may translate
into favorable valuations and an increase in inbound M&A
activity geared towards acquiring technology and/or market
access over the next 18 to 24 months. This resonates with
Autofacts’ projections which forecasts that light vehicle sales
will remain sluggish in 2013, but should recover by around
5% in 2014 to approximately 14.5 million units, helped by
increasing levels of pent-up demand. This assumes that the
economic situation in most EU+EFTA countries will
improve from 2014 onwards.
As a result, North American acquirers’ share of global M&A
increased from 20% in 2010 to 27% in 2012. North
American entities also were the most prominent crossborder acquirers, with 34 out of 102 cross border deals.
Asia
Most activity in Asia was within its own region, with 136
transactions between Asian entities. With the domestic sales
slowdown in both China and India, buyers from these
markets may look for opportunities to augment domestic
sales. These buyers are also likely to pursue technology
deals to compete globally, as well as to effectively compete
with foreign competition in domestic markets.
Further, strategic players from emerging countries like
China and India are likely to capitalize on the opportunity to
acquire technology or market access at favorable valuations
in Europe.
2012 Automotive Insights
5
Share of deal volume by acquiror region
2007–2012
100%
11%
90%
9%
21%
24%
31%
27%
80%
12%
7%
27%
25%
9%
27%
Share of deal volume by target region
2007–2012
9%
33%
8%
24%
21%
10%
31%
23%
7%
8%
28%
32%
70%
24%
20%
60%
23%
27%
50%
46%
40%
30%
4%
12%
90%
80%
70%
60%
100%
37%
40%
26%
25%
20%
22%
24%
50%
40%
41%
39%
28%
38%
42%
42%
45%
43%
36%
30%
31%
20%
20%
10%
10%
0%
0%
2007
2008
Europe
2009
US
2010
Asia
2011
2007
2012
2008
Europe
Row
2009
US
2010
Asia
2011
2012
Row
Sources: Thomson Reuters and other publicly available sources.
Sources: Thomson Reuters and other publicly available sources.
Share of disclosed deal value by acquiror region
2007–2012
Share of disclosed deal value by target region
2007–2012
100%
90%
80%
4%
7%
6%
2%
10%
21%
31%
17%
21%
31%
60%
31%
58%
50%
5%
68%
40%
70%
40%
2% 36%
4%
24%
100%
6%
90%
7%
80%
43%
3%
2% 2% 1%
2%
2%
13%
45%
26%
22%
68%
17%
70%
33%
60%
50%
47%
41%
30%
43%
40%
28%
67%
30%
48%
44%
39%
30%
31%
29%
20%
20%
24%
19%
10%
10%
0%
0%
2007
2008
Europe
2009
US
2010
Asia
2011
2012
Row
Sources: Thomson Reuters and other publicly available sources.
6 PwC
2007
2008
Europe
2009
US
2010
Asia
2011
2012
Row
Sources: Thomson Reuters and other publicly available sources.
Deal flow centers on Europe
By volume
By value
After years in the number two position, Asia topped Europe
in 2012 as the largest global acquiror. Notably, European
assets maintained their position as the largest share of
targets. Europe was the largest beneficiary of cross border
investments with 47 inbound deals being transacted in the
region during 2012, of which approximately 43% were
investments by US companies. On the other hand, Europe
was the least active outbound region in 2012 with only 19
deals transacted by European buyers in other regions, down
from 32 in 2011.
While Europe conducted fewer deals, the region did lead in
deal value by almost double over any other region. Europe
recorded the largest acquisition deal value with an interregion disclosed deal value of $11.7 billion attributable to
the VW-Porsche acquisition valued at $8.9 billion.
Local region vs. cross-border investment
Europe
Local: 131 deals, $11.7 billion
Inbound: 47 deals, $2.8 billion
Outbound: 19 deals, $1.4 billion
US
Local: 99 deals, $6.8 billion
Inbound: 20 deals, $1.6 billion
Outbound: 34 deals, $2.6 billion
Asia (Asia & Oceania)
Local: 136 deals, $6.2 billion
Inbound: 19 deals, $481 million
Outbound: 28 deals, $139 million
RoW (rest of world)
Local: 22 deals, $490 million
Inbound: 16 deals, $173 million
Outbound: 21 deals, $882 million
Sources: Thomson Reuters and other publicly available sources.
2012 Automotive Insights
7
Segment analysis
Global auto M&A deal flow by region
15
Inbound
5
0.2
0
1.8
-1.3
-0.7
Outbound
Net foreign investment ($billion)
0.1
10
0
2.7
-2.3
11
2.0
-1.6
-11
-2.2
-0.2
-0.4
0.3
1.3
3.8
-0.7
-1.0
-0.7
-0.8
-0.2
-5
-10
-0.6
Europe
US
Asia
2012
2011
2010
2009
2008
2007
-15
Row
Sources: Thomson Reuters and other publicly available sources.
Deal activity amongst the segments in 2012 has shifted
away from Component Suppliers and Others towards
Vehicle Manufacturers. Vehicle Manufacturers experienced
its strongest year in the past 5 years, in terms of volume and
disclosed value, while Component Suppliers and Others
deal volumes declined significantly when compared to 2011.
This shift is partly driven by Vehicle Manufacturers seeking
cost synergies such as, technology and plat-form sharing
through strategic alliances.
Component suppliers witnessed steady transaction volumes
in the first half of 2012 but declined significantly in the
second half. Vehicle manufacturers, on the other hand, saw
increased transaction volumes H2 2012. The shift towards
vehicle manufacturers is at its highest level since the
bottoming out of production volumes in 2009, the result of
a renewed interest in the automotive industry, despite
a slight set back in 2011. This uptick can primarily be
attributed to an increased number of deals being transacted
in Asia and Europe. Asia, which for the last 2 years has
accounted for the largest share of deal volume by target
region in the category, closed 41 deals in 2012 compared to
33 deals in 2011. Despite an increase in deal volume, deal
value, adjusted for the Porsche and VW transaction of
$8.9 billion, declined significantly in 2012 when compared
to 2011.
Despite a sharp uptick in deal volume and value during
2011, the ‘Others’ category which includes: retail,
aftermarket, rental/leasing and wholesale, etc. experienced
a significant slowdown in 2012, which is more in line with
2010 levels.
8 PwC
Other M&A activity
2007–2012
120
97
74
80
86
60
60
40
57
56
40
20
0
11.5
15.7
88.2
12.1
15.4
2007
2008
2009
2010
2011
2012
Disclosed deal value
287
272
300
250
261
205
15
200
150
10
157
151
100
50
0
0
$10.1
$4.3
$14.1
$8.3
$19.2
$5.9
0
2007 2008 2009 2010 2011 2012
Disclosed deal value
Porsche/VM
transaction
Deal volume (R-Axis)
20
5
20
8.9
6.3
Disclosed deal value ($billion)
100
91
80
350
25
Deal volume
Disclosed deal value ($billion)
100
Deal volume
Vehicle manufacturers M&A activity
2007–2012
Deal volume (R-Axis)
Sources: Thomson Reuters and other publicly available sources.
Sources: Thomson Reuters and other publicly available sources.
Component suppliers M&A activity
2007–2012
350
40
275
300
278
30
250
214
236
189
200
20
150
Deal volume
Disclosed deal value ($billion)
303
100
10
50
0
$35.5 $11.6 $19.6
$4.4
$10.2
$9.2
0
2007 2008 2009 2010 2011 2012
Disclosed deal value
Deal volume (R-Axis)
Sources: Thomson Reuters and other publicly available sources.
2012 Automotive Insights
9
Financial versus trade
Trade buyers M&A activity
2007–2012
35
Consistent with the overall Automotive M&A deal market,
both financial and trade buyers’ M&A activity slowed during
2012 compared to 2011. However, Financial Buyers share of
M&A volume declined to 24%, which represents the lowest
levels witnessed since the depths of the recession.
500
461
434
431
450
379
25
400
373
366
350
300
20
250
15
200
Deal volume
Disclosed deal volume ($billion)
30
150
10
100
5
50
$32.0
$26.1
$27.2
$14.8
$31.2
$26.1
2007
2008
2009
2010
2011
2012
Unlike 2011, financial buyers chose to focus on Component
Suppliers during 2012. However, consistent with 2011,
financial buyers continued to shift their focus away from
Europe and toward the US and Asian assets. In 2012, demand
for US assets was nearly par with European assets, a level not
seen in the past several years. This further supports that
financial buyers are wary of the EU economic situation and
are more inclined to close deals in more stable economic
climates such as that of the US.
Sources: Thomson Reuters and other publicly available sources.
On the other hand, consistent with global trends, trade
buyers increased their focus on Vehicle Manufacturers in
2012 and also shifted their focus away from Europe toward
Asian assets. In 2012, demand for Asian assets was nearly par
with European assets, a level not seen in the last 5 years.
Financial buyer M&A activity
2007–2012
Financial buyer share of M&A activity
2007–2012
Trade value
100
Trade volume (R-Axis)
166
143
180
100
160
90
140
80
160
90
141
80
70
120
118
60
117
100
50
80
40
60
30
40
20
10
$5.5
$25.1
0
2007
2008
Financial value
$94.7
$10.0
$13.7
2009
2010
2011
$4.2
2012
Trade volume (R-Axis)
Sources: Thomson Reuters and other publicly available sources.
10 PwC
Share of M&A activity
Disclosed deal volume ($billion)
0
Deal volume
0
70
60
50
40
30
31%
24%
27%
27%
21%
20
20
10
0
0
24%
44%
17%
78%
40%
30%
14%
2007
2008
2009
2010
2011
2012
Financial buyer share
of total value
Financial buyer share
of total volume
Sources: Thomson Reuters and other publicly available sources.
Financial buyer: Share of deal volume by category
2007–2012
Financial buyer: Share of deal volume by target region
2007–2012
100%
100%
42%
46%
58%
35%
44%
32%
90%
90%
80%
80%
70%
70%
8%
8%
17%
13%
10%
6%
21%
17%
8%
9%
19%
20%
35%
60%
50%
54%
48%
45%
43%
42%
37%
23%
18%
40%
34%
30%
30%
48%
44%
37%
35%
20%
20%
10%
36%
55%
50%
49%
40%
26%
60%
13%
17%
13%
14%
14%
2011
2012
8%
0%
2007
2008
2009
Vehicle
manufacturer
10%
0%
2010
Component
supplier
2007
2008
Europe
Others
2009
US
2010
2011
Asia
2012
ROW
Sources: Thomson Reuters and other publicly available sources.
Sources: Thomson Reuters and other publicly available sources.
Trade buyer: Share of deal volume by category
2007–2012
Trade buyer: Share of deal volume by target region
2007–2012
100%
100%
46%
48%
52%
27%
31%
32%
90%
90%
80%
80%
70%
60%
46%
8%
27%
26%
24%
26%
34%
7%
7%
31%
35%
22%
46%
60%
26%
21%
21%
21%
50%
38%
36%
40%
40%
42%
39%
30%
39%
42%
41%
37%
30%
20%
18%
10%
0%
9%
70%
56%
54%
50%
3%
13%
14%
11%
2008
2009
22%
15%
20%
10%
8%
0%
2007
Vehicle
manufacturer
2010
2011
Component
supplier
2012
Others
Sources: Thomson Reuters and other publicly available sources.
2007
2008
Europe
2009
US
2010
Asia
2011
2012
ROW
Sources: Thomson Reuters and other publicly available sources.
2012 Automotive Insights
11
In summary
Top 10 deals—Vehicle manufacturers
Date
effective
Target
name
Target
nation
Acquirer
name
Acquirer
nation
% of
shares acq
Value of
transaction
($mil)
Buyer
type
Vehicle manufacturers
1
8/1/2012
Dr Ing hcF Porsche
AG
Germany
Volkswagen AG
Germany
50
8,855
TRADE
2
07/19/12
Ducati Motor
Holding SpA
Italy
Automobili
Lamborghini SpA
Italy
100
1,046
TRADE
3
03/16/12
Proton Holdings
Berhad
Malaysia
DRB-HICOM Bhd
Malaysia
100
963
TRADE
4
01/01/12
Toyota Auto Body
Co Ltd
Japan
Toyota Motor Corp
Japan
43
957
TRADE
5
03/20/12
GAC Changfeng
Motor Co Ltd
China
GAC
China
71
709
TRADE
6
02/14/12
Avtovaz
Russia
Rostekhnologii
Russia
29
420
TRADE
7
03/27/12
PSA Peugeot
Citroen SA
France
General Motors Co
United States
7
399
TRADE
8
01/01/12
Kanto Auto Works
Ltd
Japan
Toyota Motor Corp
Japan
50
366
TRADE
9
10/11/12
Guangqi Mitsubishi
Automobile
China
Investor Group
Japan
50
219
FIN
10
03/28/12
Man Force Trucks
Pvt Ltd
India
MAN Nutzfahrzeuge
AG
Germany
50
202
TRADE
12 PwC
Top 10 deals—Component suppliers
Date
effective
Target
name
Target
nation
Acquirer
name
Acquirer
nation
% of
shares acq
Value of
transaction
($mil)
Buyer
type
Component suppliers
1
10/26/12
Motorized Vehicles
Division
England
Delphi Automotive
PLC
United States
n/a
1,199
TRADE
2
11/27/12
FleetPride Inc
United States
TPG Capital
United States
n/a
1,000
FIN
3
12/19/12
Metaldyne Corp
United States
American Securities
LLC
United States
100
820
FIN
4
02/01/12
Hayes Lemmerz
Intl Inc
United States
Iochpe Holdings LLC
United States
100
725
TRADE
5
01/31/12
Toray Tonen
Specialty
Japan
Toray Industries Inc
Japan
50
702
TRADE
6
11/30/12
ixetic Verwaltungs
GmbH
Germany
Magna International
Inc
Canada
100
396
TRADE
7
11/01/12
Dexter Axle Co
United States
Sterling Group
Partners III LP
United States
100
360
FIN
8
05/21/12
Dunkermotoren
GmbH
Germany
AMETEK Inc
United States
100
320
TRADE
9
02/29/12
Sibur-Russkie
Shiny-Certain As
Russia
Investor Group
Italy
100
319
FIN
10
05/31/12
Guilford Mills Inc
United States
Lear Corp
United States
n/a
257
TRADE
Top 10 deals—others
Date
effective
Target
name
Target
nation
Acquirer
name
Acquirer
nation
% of
shares acq
Value of
transaction
($mil)
Buyer
type
Others
1
11/20/12
Dollar Thrifty
Automotive Grp
United States
Hertz Global Holdings United States
Inc
100
2,568
TRADE
2
12/03/12
SPX Service
Solutions
United States
Robert Bosch GmbH
Germany
100
1,150
TRADE
3
04/30/12
Midas Inc
United States
TBC Corp
United States
100
307
TRADE
4
05/23/12
Meca Scandinavia
AB
Sweden
Mekonomen AB
Sweden
100
289
TRADE
5
09/30/12
Peugeot-Car
Dealerships(30)
France
Fonciere LFPI SAS
France
100
213
FIN
6
01/05/12
Exego Pty Ltd
Australia
Genuine Parts Co
United States
30
150
TRADE
7
01/16/12
Hanco
Saudi Arabia
Bin Sulaiman Holding
Co Ltd
Saudi Arabia
40
140
FIN
8
07/09/12
Automotive Holdings
Group Ltd
Australia
AP Eagers Ltd
Australia
16
128
TRADE
9
10/17/12
Navigator Holdings
LLC
United States
WL Ross & Co LLC
United States
50
110
FIN
10
11/30/12
Triwest Trading Ltd
Canada
American Tire
Distributors Inc
United States
100
98
TRADE
* Value of Transaction represent total funds raised by Fisker Automotive through multiple rounds of financing during H1 2011
2012 Automotive Insights
13
Looking ahead
While M&A recovery and growth in the automotive sector
have been constrained by significant challenges in the global
macroeconomic environment, we see signs of growth in the
next few years. PwC’s positive outlook for M&A stems from
the fact that the global automotive sector is expected to add
nearly 30 million units between 2012 and 2019. We believe
M&A will remain steady with continued activity while some
dealmakers with capital stay on the sidelines.
Key factors that we predict to spark automotive M&A
growth are:
• High levels of liquidity on corporate balance sheets.
• Strategic initiatives to expand market share and grow
customer, technological and product portfolios.
• Resolution of the EU’s sovereign debt issues of
member states.
• Strong economic recovery and pent-up demand in
developed countries such as the US.
• Resumption of trendline economic growth in China
and India.
Global light vehicle assembly outlook
2000–2019
GR =
19 CA
- 20
2012
110
4.4%
900
800
90
700
80
621
584
70
60
588
462
594
604
594
600
532
515
549
500
520
490
50
400
40
300
30
200
20
100
10
0
53
55
56
58
63
65
69
66
58
72
75
79
83
89
95
99
102
105
106
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Global light vehicle assembly outlook
Automotive M&A deal volume (R-Axis)
Sources: PwC Autofacts Q1 2013 Release, Thomson Reuters and other publicly available sources, PwC Analysis
14 PwC
0
Deal volumes
Assembly volumes (millions)
100
Contacts
To have a deeper discussion about our point of view on automotive M&A, please contact:
Authors
US Automotive Transaction Services Leader
Paul Elie—+1 (313) 394 3517
[email protected]
Director, Automotive Transaction Services
Harry Gruits—+1 (313) 394 3023
[email protected]
Experienced Associate, Automotive Transaction Services
Christopher Becker—+1 (313) 394 3237
[email protected]
Automotive transaction services
Brazil
Humberto Tognelli—+55 (11) 3674 3855
[email protected]
Canada
Damiano Peluso—+1 (416) 814 5776
[email protected]
China
Leon Qian—+86 (10) 6533 2940
[email protected]
Tang Xun—+86 (21) 2323 3396
[email protected]
France
Philippe Couderc—+33 (1) 5657 1302
[email protected]
Germany
Martin Schwarzer—+49 (0) 69 9585 5667
[email protected]
India
Sanjeev Krishan—+91 (12) 4330 6017
[email protected]
Italy
Francesco Giordano—+39 348 1505447
[email protected]
Japan
Taizo Iwashima—+81 (3) 6266 5572
[email protected]
UK
Jason Wakelam—+44 (0) 77 1471 1133
[email protected]
US
Paul Elie—+1 (313) 394 3517
[email protected]
Automotive leadership
Global Automotive Leader
Richard Hanna—+1 (313) 394 3450
[email protected]
Asia Pacific Automotive Leader
Thomas McGuckin—+86 (21) 2323 33588
[email protected]
European Automotive Leader
Felix Kuhnert—+49 711 25034 3309
[email protected]
U.S. Automotive Advisory Leader
Brian Decker—+1 (313) 394 6559
[email protected]
Global Automotive Advisory Leader
Dietmar Ostermann—+1 (313) 394 3220
[email protected]
Global Automotive Tax Leader
Horst Raettig—+49 (30) 2636 5301
[email protected]
2012 Automotive Insights
15
Corporate finance
Canada
Damian Peluso—+1 (416) 814 5776
[email protected]
Germany
Martin Schwarzer—+49 (69) 9585 5667
[email protected]
Italy
Marco Tanzi Marlotti—+39 (02) 8064-6330
[email protected]
Japan
Taizol Iwashima—+81 (3) 6266 5572
[email protected]
UK
Darren Jukes—+44 (20) 7804 8555
[email protected]
US
Mike Milani†—+1 (312) 298 2755
[email protected]
†
Corporate Finance services in the US are performed by PricewaterhouseCoopers
Corporate Finance LLC (“PwC CF”), a registered broker dealer. PwC CF is owned
by PricewaterhouseCoopers LLP, a member firm of the PricewaterhouseCoopers
Network, and is a member of FINRA and SIPC.
16 PwC
Automotive marketing and
knowledge management
Global and U.S. Automotive Marketing Leader
Kristin McCallum Ritter—+1 (313) 394 6349
[email protected]
Automotive Marketing Manager
Meghan Bested—+1 (313) 394 3209
[email protected]
Automotive Central Cluster Manager
Birge Kanzleiter—+1 (313) 394 3244
[email protected]
Global reach
About Autofacts®
Autofacts, PwC’s automotive forecasting service, is a provider
of automotive market analysis, strategy development, and
competitive intelligence to the world’s leading vehicle
manufacturers, automotive suppliers, and support
organizations. Autofacts service offerings are available
on-demand, for one-time purchase and through an annual
subscription basis to access the on-line portal with Autofacts’
proprietary data query tool. For more information regarding
Autofacts, please visit their website at www.autofacts.com.
About the Transaction Services Practice
The PwC’s Transaction Services practice provides due
diligence on both the buy and sell side of a deal, along with
advice on M&A strategy, valuation, accounting, financial
reporting, and capital raising. For companies in distressed
situations, we advise on crisis avoidance, financial and
operational restructuring and bankruptcy. With
approximately 1,000 deal professionals in 16 cities in the
US and over 6,000 deal professionals in over 90 countries,
experienced teams are deployed with deep industry and local
market knowledge, and technical experience tailored to each
client’s situation. Our field-proven, globally consistent,
controlled deal process helps clients minimize their risks,
progress with the right deals, and capture value both at the
deal table and after the deal closes.
“PwC was recognized as having the largest Transaction
Advisory Services Practice by revenue. PwC was also named a
“Vanguard” firm and recognized by Kennedy as having the
highest breadth and depth of service capabilities”.
Source: Kennedy; “Transaction Advisory Consulting Marketplace Report
2009–2012”; © BNA Subsidiaries, LLC. Reproduced under license.
2012 Automotive Insights
17
Visit our automotive industry website at
www.pwc.com/auto
© 2013 PricewaterhouseCoopers LLP. All rights reserved. “PricewaterhouseCoopers” and “PwC” refer to PricewaterhouseCoopers LLP, a Delaware limited liability partnership, or, as the context
requires, the PricewaterhouseCoopers global network or other member firms of the network, each of which is a separate legal entity. This document is for general information purposes only, and
should not be used as a substitute for consultation with professional advisors. MW-13-0341 jp
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