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| Global aerospace M&A deals halve in 2009 |
| Press Trust of India / New York Feb 23, 2010, 18:51 IST |
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Merger and acquisition deals in the global aerospace and defence sector more than halved to $10 billion in 2009, with firms staying away from large deals due to uncertain economic conditions, says a report.
According to global consultancy PricewaterhouseCoopers LLP report, total aerospace and defence (A&D) deal value fell to its lowest level for a decade in 2009. The total A&D deal value dropped by 54 per cent to $10 billion in 2009.
Deal values continued to plummet as the total value of large deals (with values of at least $50 million) fell sharply last year, PwC said. The average value of large deals fell from $519 million in 2008 to $379 million in 2009.
"During 2009, most companies were reluctant to engage in large deals due to uncertainty over economic conditions and the future of defence spending, as well as the motivation to preserve capital in a very tight credit market. Toward the end of 2009, we saw some positive economic signs, as well as a loosening of credit, particularly for companies with strong balance sheets, creating more confidence among buyers," PwC US Aerospace & Defence Leader Scott Thompson said.
For 2010, PwC expects a rebound in large deal activity among the large corporate buyers which can leverage their access to capital, while small and strategic deals would remain the trend for the rest of buyers.
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