Automotive Newsletter Q2 2023

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Overview of M&A Activity

The European automotive market is subject to opposing developments, on the one hand, the pressures on supply chains, and the availability of preliminary products and raw materials are easing however, on the other hand, the lower pre-COVID-19 cost level is looking unattainable.

In contrast to global growth, car sales in Europe are expected to remain around 15% below pre-COVID-19 levels in the medium-term. Other negative factors include rising interest rates, which causes refinancing to become more expensive and reduces demand due to more expensive consumer credit.

M&A deal count has more than doubled from Q2 2022 to Q2 2023

The automotive M&A deal count has more than doubled from Q2 2022 to Q2 2023 with 51 and 108 transactions, respectively. The cumulative deal value has slightly declined in Q2 2023 (€8.1bn) compared to Q2 2022 (€9.6bn). M&A activity in Q2 was mainly driven by deals in the areas of enhanced safety sensorics, software solutions, and manufacturing components with investments in companies such as Veoneer, ClearMotion, AdaSky,, and Borgers.

Across Europe, a slight decrease in valuation multiples from Q2 2023 compared to Q1 2023 was observed as EV/Sales, EV/EBITDA, and EV/EBIT multiples dropped by 0.2%, 1.0%, and 1.9%, respectively. The North American market presents a better development with EV/Sales, EV/EBITDA, and EV/EBIT multiples increasing by 6.8%, 6.8%, and 5.4% in Q2 2023, respectively. In Asia, positive valuation trends continued in the second quarter of the year as EV/Sales, EV/EBITDA, and EV/EBIT multiples increased by 15.5%, 18.7%, and 20.1% compared to Q1 2023.

China is rapidly emerging as the dominant force within the automotive industry, overtaking Japan as the global automotive export champion in Q1 2023, as more and more Chinese EVs enter the European markets. In contrast, European OEMs find themselves in a challenging position of defending their home market shares whilst facing margin pressures in a cooling market environment with intensifying competition, making it increasingly challenging to maintain high prices or achieve price increases.

M&A Activity: Quarterly Comparison Q2 2022 – Q2 2023

MA Activity Quarterly Comparison Q2 2022 Q2 2023

Top M&A Deals Q2 2023

  • Veoneer Active Safety, a Sweden-based provider of automotive safety technology and radar sensor, camera-based vision, and distance measuring systems, acquired for a consideration of €1.4bn by Magna International. The acquisition will help Magna to build a more comprehensive, active safety portfolio.
  • ClearMotion, a US-based developer and manufacturer of software-controlled actuators for shock absorption and related software, raised funding of €26m. In this round, participants included Sequoia Capital China and Bertelsmann Asia Investments, amongst others. ClearMotion aims to utilise the raised funds to bring its technology to the market, providing consumers worldwide with enhanced in-cabin experience.
  • AdaSky, an Israel-based pioneering force in Far-Infrared (FIR) technology specifically designed for autonomous vehicles, secured a Series B funding round of €27.2m. The lead investor was Gentex Corp., a US-based company specialising in the manufacturing of products that utilise electro-optic technology, which is seeking to establish a collaboration with AdaSky in the areas of production and marketing.
  •, a UK-based provider of EV charging infrastructure and solutions, secured an investment of up to €57.6m from Octopus Investments. The investment in represents the inaugural deployment of the Octopus Sustainable Infrastructure Fund (OSIF), a strategic initiative introduced by the group in the previous year to support innovative infrastructure projects for the future.
  • Borgers, a Germany-based automotive business, and provider of textile acoustic protection, insulation, and interior trim, acquired for a consideration of €117m by Autoneum Holding AG. The acquisition of the German company will help Autoneum to further expand its market leadership in sustainable acoustic and thermal management of vehicles.

Selected Recent Global Automotive Bond Issuances Q2 2023

CompanyDate of IssuanceAmount (in €m)Coupon (in %)Yield (Latest)Price (Latest)Maturity Date
Forvia SE04.06.202312.00.00%3.75%
Continental AG01.06.2023750.04.00%4.16%
Adler Pelzer Holding GmbH19.05.2023400.09.50%11.91%92.901.04.2027
Benteler International AG15.05.2023525.09.38%9.07%
Clarios Global LP04.05.2023690.16.75%6.95%
Sources: FACTSET, MergerMarket, AlixPartners, EbnerStolz

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