The M&A value in Q3 2019 continued the declining trend the sector has experienced throughout the current year. It fell 29% compared to Q2 2019 and there was a similar decline from the value in Q3 2018.
Outside factors have all weighed on M&A activity in the sector, despite continued demand for infrastructure improvements, said PwC. “One positive trend that we believe underscores the underlying favourable deal characteristics is the recovery of M&A volume in Q3 2019 which increased 8% versus Q2 2019 and almost 9% versus Q3 2018,” it said. However, M&A activity will likely be restrained for the balance of the year until some of the overarching head winds – such as trade tensions - subside.
Deal value declined by 29% to US$16.3bn (£12.7bn) over Q2 2019. Deal value for YTD 2019 also declined by 8% to US$62.7bn when compared to YTD 2018.
Deal volume grew 8% to 644 deals vis-à-vis Q2 2019, but in YTD 2019 the deal volume declined by 5% to 1,829 deals when compared with YTD 2018.
Average deal size in Q3 2019 decreased by 29% to US$75.1m, when compared to Q2 2019. Similarly, the average deal size in this year to date declined slightly by 3% to US$98bn when compared with last year.
PwC said that a number of geopolitical events are coming to the forefront including the potential resolution of a Brexit plan and continued trade discussions between the US and China. If settled, these will likely help resolve some of the overhang that has held back M&A activity in the sector during 2019 so far, it said.
Key planned transactions announced this year include a US$5.8bn acquisition of a Vodafone mobile tower business in Italy, UK company J2 Acquisition's US$2.3bn bid for the USA's APi Group, ATC Heston's proposed acquisition of Eaton Towers Holding and Bovis's £1bn bid for parts of Galliford Try.