Automotive Newsletter Q2 2019

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Overview of M&A activity

In Q2 2019, the number of deals in the Automotive sector decreased by 30% compared to Q2 2018. However, when compared to the previous quarter, both the number of deals and total deal value in Q2 2019 increased.

Automotive M&A activity in Q2 2019 was strongly influenced by macroeconomic headwinds, such as the continuing trade tensions between the US and China, uncertainties around Brexit, and the general technological uncertainty in the market. Consolidation through M&A in the internal combustion engine area is still ongoing, combined with a strong appetite for M&A and other forms of co-operation in the new energy vehicle and autonomous driving / connectivity segments. OEMs and leading Tier I automotive suppliers see a need to increase efforts to invest into new business models influenced by the megatrends of electrification, autonomous driving and connectivity, which are increasingly putting pressure on margins and cash-flows.

In Q2 2019, automotive multiples increased in North America, whilst they were relatively stable in Europe and decreased in Asia, when compared to Q1 2019: EV/EBIT multiples decreased in Europe by 2%, increased in North America by 9% and decreased in Asia by 3%. EV/EBITDA multiples were stable in Europe, increased in North America by 2% and decreased in Asia by 5%.

M&A Activity: Quarterly Comparison Q2 2018 – Q2 2019

Automotive newsletter Q2 2019 deal volume

Top M&A Deals Q2 2019

  • A group of investors (consisting of Honda Motor Co., SoftBankGroup, T. Rowe Price Associates, and General Motors Co.) has acquired an undisclosed stake in GM Cruise LLC, a US-based company engaged in manufacturing fully autonomous vehicles, for a total EV of €16.9bn.
  • Ford Motor Co. has acquired an undisclosed stake in RivianAutomotive, Inc., the US-based developer of electric self-driving trucks, for €446.8m. Rivianwill continue to operate as an independent company.
  • NFI Group Inc., a Canada-based manufacturer of heavy-duty transit buses and coaches, has acquired Alexander Dennis Limited (ADL) from Souter Investments Ltd. for €362.6m. The transaction will enable both companies to strengthen their international presence.
  • Standard Motor Products, Inc., has acquired the Pollakbusiness of Stoneridge, Inc., for €36m. The Pollakbusiness is engaged in manufacturing and distribution of a range of engine management products.
  • Sumitomo Electric Industries, Ltd., a listed Japan-based manufacturer and distributor of electric wires and cables, has acquired SinterwerkeHerne GmbH (SHG) and SinterwerkeGrenchenAG (SGA) from DubbersManagement & Consult GmbH, for an undisclosed consideration. Both, SHG and SGA, are engaged in the manufacturing of powdered metal components.

Selected Recent Global Automotive Bond Issuances Q2 2019

CompanyDate of IssuanceAmount (in €m)Coupon (in %)Yield (Latest)Price (Latest)Maturity Date
NGK Spark21.06.20191640.270%0.296%99.8120.06.2029
Toyota Motor25.06.20194392.760%2.739%100.7102.07.2029

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