Automotive transactions and trends 1H16

Global automotive mergers and acquisitions review

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Digital disruption and innovation are driving the automotive M&A environment

The automotive sector has accepted the reality of an extended low-growth global economic environment, with modest or stable growth expectations.

Despite strong deal fundamentals and a healthy deal environment, automotive transactions slowed during 1H16, likely as a result of the Brexit decision, the US presidential election and moderating growth in China, among other drivers.

Low interest rates, high levels of corporate cash and access to financing continue, however. If current economic worries prove to be short-lived, we could see transactions, particularly in the mid-market, pick up toward the end of the year.

Digital disruption and the blurring of sector lines have automotive companies planning for multiple possible futures. M&A plays a critical role within these scenarios, as an important transformative option for expanding on the core products and services of today, and accelerating emerging businesses of tomorrow.

Automotive companies that successfully balance their M&A plans with strategic and innovative corporate initiatives will be well positioned to win in the evolving marketplace.

Executive summary

While deal fundamentals were supportive of a healthy transactions market, automotive deal activity slowed during 1H16. Automotive companies maintained a cautious dealmaking approach, focusing on synergy savings generation and expansion of geographic footprint.

EY - Executive summary

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