March 9, 2015
Analysis of deal activity in 2014 revealed a lackluster year as M&A volume and value remained near ten-year lows.
Despite subdued performance, we are cautiously optimistic regarding 2015 as advanced economies continue to recover and emerging and developing economies continue to grow.
Looking forward, one key driver of improved activity across modes will likely be the decline in fuel costs globally.
We expect these prices to provide additional capital for more M&A.
Intersections is a quarterly analysis of global merger and acquisition (M&A) activity in the transportation and logistics (T&L) industry. It provides an overview of the most recent M&A results and our expectations for future deal activity.
Highlights of what this quarter’s analysis revealed:
- Local-market deals remained popular as companies sought synergies, which tend to be easier to attain at the local level.
- Infrastructure targets, such as toll roads and ports, accounted for a significant proportion of megadeals this year due to the benefit of stable, long-term returns and strong barriers to competition.
- The sector experienced a significant increase in trucking deals as larger companies looked to increase market share.
- Overcapacity in shipping is believed to be driving consolidation in that mode as larger players attempt to reduce competition and create more efficient economies of scale.
- Stock swaps, as a means for acquisition financing, increased somewhat in 2014 due to general improvement in the equity market over the course of the year in addition to strong activity in the fourth quarter.
- Looking ahead, a decline in fuel costs globally could improve activity across modes with the expectation that these prices will improve profitability and shore up balance sheets.
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