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PwC: Aerospace, Defense Sector Recorded $58.3B in Q2 2019 M&A Deal Value

A new PwC report says the value of mergers and acquisitions in the global aerospace and defense industry was $58.3B in the second quarter of 2019 and the total deal value for year-to-date 2019 was $64.4B, increasing by 2.7x when compared with YTD 2018.

PwC said the proposed $52B merger of United Technologies Corp. (NYSE: UTX) and Raytheon (NYSE: RTN) marked the second quarter of this year and is the largest transaction in the A&D sector in the last six years.

Raytheon and UTC announced in June that they agreed to merge in an all-stock deal to establish a platform-agnostic technology provider with approximately $74B in revenue.

“While UTC/Raytheon is absolutely the highlight for the quarter, we believe it is equally important to appreciate the underlying ‘normal’ deal flow and the lack of its recovery from a slower first quarter of the year,” said Bob Long, U.S. aerospace and defense deals leader at PwC.

The global A&D sector recorded a total of 110 deals in Q2 2019, while the total deal volume for YTD 2019 was 5 percent higher than the 10-year deal volume average. The average deal size for the quarter was $1.2B, which rose by 3.3x in YTD 2019 compared to a 10-year average. The electronic equipment category posted $53B in Q2 2019 deal value driven by the proposed UTC-Raytheon merger.

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