PwC Releases Q4 Engineering & Construction M&A Report

 According to the latest report from PwC on M&A activity in the engineering and construction space, 2019 ended with a bit of an uptick in overall deal value versus the first three quarters of 2019 with Q4 value totaling $24.1 billion. However for the full year, 2019 was the third consecutive year of decreases in annual M&A value. Following are some key takeaways from the report:

• M&A transactions totaled $85.2 billion in 2019, down 17% from 2018’s value of $102.4 billion (and 28% from 2017 value of $119 billion).
• Total cross-border M&A was $23.5 billion, a decrease of $20.5 billion from 2018.
• Despite sector headwinds that dampened underlying sector M&A activity in 2019, the underlying fundamentals remain strong and supportive of M&A activity.
• Urbanization continues to place ever-increasing demands on aging infrastructures, which combined with housing needs will continue to provide positive factors to drive sector growth and be a catalyst to create M&A opportunity.
• Recent movements on a potential trade deal between China and the US could reduce some of the friction that has contributed to decreases in deal making within the sector.
• With record levels of available capital and strong underlying sector fundamentals, 2020 is likely to benefit from reduced trade friction and a softening geopolitical tensions.
• The information presented in this report is an analysis of deals in the global E&C industry. Deal information was sourced from Thomson Reuters and includes deals for which targets have an SIC code that falls into one of 60 E&C industry groups. For more details on M&A activity, read the full report.