The economy’s recovery from the pandemic is affecting industrial manufacturing mergers and acquisitions. According to PwC, industrial manufacturing M&A is becoming more frequent, a deal value between the first half of 2020 and the first half of 2021 increased, and companies are figuring out how to adapt to post-pandemic life.
PwC also offered predictions for what to expect in the second portion of 2021.
PwC says deal activity is expected to increase in the second half of 2021 as the United States continues to open and as other countries recover from the pandemic’s impact.
When deal activity occurs on a regular basis in the U.S. on a target and acquirer level, the rest of the world sees a jolt in M&A. But as foreign economies return to form, cross-border transactions will return and deal-making will achieve higher levels.
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Also, special purpose acquisition company (SPAC) activity is expected to increase. This involves development-stage enterprises in areas including electric vehicle (EV) charging infrastructure, power storage, and 3D printing.
Companies are expected to continue investing in additive manufacturing, digital development (including digital supply chain solutions), and technologies supporting sustainability. The pandemic highlighted the need for companies to improve technological capabilities to limit operational disruptions and decrease supply chain risks.
The pandemic inspired new ways of living, especially how businesses and consumers acquire goods and services. In the aftermath of COVID-19, digital supply chain and digital sales and marketing are paramount to industrial manufacturing companies.
Those companies lacking in digital supply chain and sales and marketing capabilities are finding it difficult to maintain the pace of their competitors. Such companies are considering M&A to advance digital strategies to help operate with greater efficiency.
Source: Thomasnet
