M&A activity in global industrial products sector at high ebb in 4Q, PwC says

Merger and acquisition (M&A) deal volume and value in the global industrial products industry rose significantly in fourth-quarter 2013, according to PwC US.

An audit, tax and consulting services firm, PwC examined M&A deal activity in the transportation and logistics, chemicals, engineering and construction, industrial manufacturing, metals, and aerospace and defense sectors. In the fourth quarter, 216 transactions were logged worth $50 million or more and totaling $83.6 billion in value compared with 181 such deals totaling $65.3 billion in third-quarter 2013.

Transportation & logistics M&A activity was a significant driver, accounting for 66 transactions of $50 million or more worth $23.2 billion compared with 42 deals worth $10.7 billion in the third quarter, PwC officials said in a press release. In addition, financial investors increased their participation across the majority of M&A market sectors, contributing 36.4 percent to total deal volume in the quarter, the highest level in five years, they said.

“We witnessed a notable uptick in the overall M&A environment across the global industrial products industry during the fourth quarter, as worldwide business sentiment continued to improve,” said Robert McCutcheon, the U.S. industrial products leader for PwC. “Despite a recent rise in volatility stemming from instability in several emerging markets and a potential slowdown in China, we may see a positive deal momentum to continue in 2014."

There also was a sequential increase in "mega deals" across several sectors in the fourth quarter, with a total of 20 such deals worth $38.1 billion, PwC officials said. The chemicals industry accounted for six mega deals valued at $10.7 billion compared with only one mega deal worth $1.3 billion in the third quarter.

"Financial investors are re-entering the M&A market in the industrial products industry, reflecting improved sentiment and moderation in perceived risk, particularly in more established global markets," said McCutcheon.

For the full year, 726 transactions were logged worth $50 million or more and totaling $257.8 billion in value versus 836 such deals worth $353.3 billion in 2012.