IMAP, an exclusive global organization of leading merger and acquisition (M&A) advisory firms, announced the findings of its Automotive and Components Global Report. The report provides detail on M&A activity in the automotive industry, growth projections for 2010 and beyond, and commentary on a shift in leadership from the U.S. to the Asia Pacific region. Year-to-date, there have been 44 completed transactions announced in the automotive industry, accounting for nearly $2.9 billion in total transaction value. IMAP advisers closed six transactions in this industrial segment during the last 12 months, details of which were disclosed in the report. IMAP released the Automotive and Components Global Report during a press conference at its Fall 2009 Global Mergers and Acquisitions Symposium in Istanbul, Turkey, on Thursday, October 22.
“Through our global access and intimate knowledge of local markets, IMAP is uniquely qualified to provide a detailed look at the factors affecting the completion of M&A transactions in the automotive industry,” said Wolfgang Wagner, IMAP’s Automotive group head in Mannheim, Germany.
“IMAP’s reach and expertise is demonstrated by the recent completion of M&A transactions on three continents, in which IMAP advised both buyers and sellers of automotive parts, engineering and fabrication,” added Eduardo Morcillo, Partner with IMAP’s office in China.
IMAP announced five of its six completed automotive industry transactions to-date in 2009, including:
• IMAP advised automotive parts remanufacturer, Remaco Group, LLC (U.S.), which acquired the shares of automotive parts remanufacturer, MD Rebuilt Parts Detzen GmbH (Germany).
• IMAP advised automotive roll former, Wagon Wixom, the U.S. subsidiary of Wagon, PLC (U.K.), which acquired the assets of roll former of metal parts, Modineer (U.S.).
• IMAP advised automotive tier one supplier, Antolin Group Automotive (Spain), which acquired 40 percent JV ownership interest in automotive interior trimming components manufacturer, Gong Zhu Lin Automotive Components Co., Ltd. (China).
• IMAP advised high-precision automotive engineer, Wild Manufacturing Group, Ltd. (United Kingdom), which acquired the shares of an undisclosed press parts manufacturer for the automotive industry (Hungary).
• IMAP advised automotive tool supplier, Talhin/T (Canada), a subsidiary of ARRK (Japan), which was acquired by automotive metal fabrication and supplier, Revstone (U.S.).
“The level of M&A activity in the automotive sector has been driven in large part by the consolidation of excess capacity due to the global recession and the growth of emerging markets,” said Scott Eisenberg, Partner with IMAP’s office in Detroit, Michigan.
IMAP has seen a shift in leadership and M&A activity in the automotive industry from the U.S. to the Asia Pacific region, which is quickly emerging as the next automobile production hub. In particular, China has been the front runner in the recovery of the automotive industry, doubling its automobile production from 2003 to 2008. This growth can be attributed to increased government emphasis on developing Chinese infrastructure, a decrease in retail taxes and an increase in vehicle subsidies in rural areas of China.
In addition to the Asia Pacific region, Eastern European countries such as Poland, Czech Republic and Hungary are becoming favored manufacturing destinations, having attracted foreign direct investment due to their proximity to Western Europe, low labor costs and a skilled workforce. Similarly, IMAP’s report indicates a majority of the automobile component production activities are concentrated in Japan, China, India and Thailand, due to the availability of cheap raw materials and increasing demand for automotive products from the domestic market.
Moving into 2010, IMAP expects the majority of growth in the automotive industry to come from India and China, driven by rising populations, an increase in per capita income and improving infrastructure. IMAP’s advisers also forecast that the hybrid vehicle market will experience strong growth, as government support for environmental legislation continues to rise. Additionally, remanufactured products, lithium ion-batteries and low cost, no-frill vehicles are expected to have an increased presence in the automotive industry.
IMAP periodically conducts reports on all major industries, providing a global perspective on M&A activity for a given period. IMAP’s reports are a result of internal information gathered for completed M&A projects from IMAP’s more than 400 advisers in nearly 40 countries throughout the world, as well as external industry sources. To view IMAP’s complete Automotive and Components Global Report, please visit www.imap.com.
IMAP is an exclusive global organization of leading merger and acquisition advisory firms. Formed in 1973, IMAP is composed of 55 offices in nearly 40 countries throughout North and South America, Eastern and Western Europe, Australia and Asia. In 2008, IMAP advisers completed 252 transactions, with an aggregate transaction value of more than $13 billion. IMAP advisers provide strategic merger, acquisition, divestiture and related corporate finance services. Sellers of mid-size companies and corporate acquirers alike rely upon IMAP for essential local market knowledge and industry expertise delivered with unparalleled global reach. Every business day, somewhere in the world, an IMAP adviser is completing an M&A transaction. More information is available via the Internet at www.imap.com.