Much has changed in the M&A space since the deals that drove the 2007 boom and the convergence of the following factors has generated broad concerns about the continued strength of the automotive deal market.
1. The inexpensive and widely available credit that fueled deal activity no longer appears easily accessible.
2. Companies in markets such as China and India are outgrowing their emerging market status and becoming key global players.
3. The US dollar, which once seemed reliably strong, has declined against other major currencies.
However, there are new deal drivers emerging such as increased interest from trade buyers, intensified restructuring, and greater cross-border investment. Allindicate continued automotive deal activity, although at a lower level of intensity.
2007 was a banner year for the automotive M&A market. It was the strongest year for deals on a value basis since the boom of the late 1990s. 604 automotive deals were transacted globally in 2007, with a total disclosed deal value of $57.1 billion.