Automotive Newsletter Q2 2022
Overview of M&A activity
Geopolitical tensions, record prices for oil and raw materials, as well as high inflation and increased interest rates weighed on the automotive sector in the second quarter of 2022. The semiconductor shortage in particular is expected to continue to impact global vehicle production through to 2024 and slow the transition towards electrification.
Activity decreased in Q2 2022 compared to 61 in Q1 2022, with a total of 51 completed transactions
These effects have also negatively impacted the global automotive M&A market. Activity decreased in Q2 2022 compared to 61 in Q1 2022, with a total of 51 completed transactions. In line with this development, the cumulative deal value has decreased in Q2 2022 (€9.6bn) compared to Q2 2021 (€13.3bn).
Contrary to this trend the areas of electromobility, connectivity and autonomous driving, as well as special situations M&A continue to show deal momentum with investments in companies such as Rimac, Inspiration Mobility and and the most recent capital increase and majority sale of Allgaier Group.
The valuation environment in Q1 2022 and Q2 2022 is still exposed to the uncertainties in the market. In Europe, EV/sales, EV/EBITDA and EV/EBIT multiples decreased by 3.8%, 1.5% and 2.9% respectively in Q2 2022. A similar trend can be observed in North America, albeit less pronounced, where EV/sales, EV/EBITDA and EV/EBIT multiples decreased by 3.2%, 1.5% and 1.8% respectively. Asia is the only region that has experienced an increase across all valuation multiples with EV/sales, EV/EBITDA and EV/EBIT multiples rising by 7.8%, 15.3% and 18.0% in Q2 2022, respectively.
Despite all uncertainties, pent-up demand for innovation will continue to drive the industry. Participants in the automotive industry can use this momentum to further push the transition to a net-zero world of transportation. Alongside the increasing improvements in electric vehicles, the opportunities in the advanced intelligent vehicle market will also drive the automotive industry with new driver assistance systems or network technologies to take vehicle safety to a new level.
M&A Activity: Quarterly Comparison Q2 2021 – Q2 2022
Top M&A Deals Q2 2022
Selected Recent Global Automotive Bond Issuances Q2 2022
Company | Date of Issuance | Amount (in €m) | Coupon (in %) | Yield (Latest) | Price (Latest) | Maturity Date |
---|---|---|---|---|---|---|
Continental AG | 27.06.2022 | 70 | 0.00% | (0.4)% | 100 | 28.07.2022 |
Yokohama Rubber | 06.06.2022 | 93.8 | 0.58% | 0.7% | 99.2 | 04.06.2032 |
Kubota | 02.06.2022 | 360.8 | 0.51% | 0.6% | 99.5 | 02.06.2032 |
Goodyear Tire & Rubber | 28.04.2022 | 838 | 5.00% | 7.5% | 86.5 | 15.07.2029 |
Notes: 1) Deal value in Q3 2021 is driven by the Atieva/ Lucid Motors transaction (€23.5bn);
Sources: FACTSET, MergerMarket, AlixPartners, VDA, Market prospects, PwC
Download the Q2 2022 Automotive Newsletter to read more about the market performance.