PwC issued its analysis of the current state of industrial manufacturing merger and acquisition (M&A) activity. Looking at the transition from 2022 to 2023, their analysts predict industrial manufacturing M&A will be strategically focused going into 2023.
A handful of industrial manufacturing transformational deals (transactions exceeding $1 billion in deal value) in the fourth quarter of 2022 pushed the year to a strong finish — despite macroeconomic headwinds — and demonstrating growth over the previous quarter.
Overall, industrial manufacturing M&A deals declined in 2022 from historic levels in 2021. However, the 2022 level of deal activity is nevertheless above historical trends, specifically higher than 2019. M&A volume in the second half of 2022 appeared to illustrate a shift to investments in North America due to economic and geopolitical uncertainty and the desire for nearshoring of certain operations. This may continue to influence the M&A landscape into 2023, despite the strengthening of the US dollar.
Strategic focus areas and investment along with portfolio review and resulting divestitures are expected to support stable deal activity going into 2023.