Industrials M&A update: Q1 2019
Growth is anticipated to continue for the industrials industry, especially in areas such as oil and gas, power and utilities, metals and mining, and automotive. While the growth factors differ for each sector, the over-arching themes of innovation and efficiency are helping drive advancements in the space. This industrials mergers & acquisitions (M&A) update provides Deloitte Corporate Finance LLC insights and market data analysis that shed light on M&A trends in the industrial products industry.
- Oil, gas, and chemicals outlook1: The 2019 energy conversation is expected to increasingly include long-term issues. Sustainability is increasingly moving to the center of strategy and investment decisions. Moreover, the growth of low-carbon energy, autonomous and electric vehicles, and energy efficiency is becoming not just a topic for futurologists, but a key focus throughout the energy and chemicals value chains.
- Metals and mining outlook2: The mining industry is poised for greater growth than it’s seen in a decade, but today’s market realities are very different than those of the past. There are geopolitical tensions in the form of trade wars, tariff concerns, and looming asset shortages. Rising commodity prices in 2019 are expected to fuel expansion. Mining companies will likely need to clarify how they plan to drive value into the future and how they will respond when prices inevitably drop.
- Automotive industry outlook3: The industry benefited from strong economic tailwinds in 2018, which are expected to continue in 2019. Unemployment reached new lows and consumer confidence reached an 18-year high. The most impactful negative trend affecting consumer demand in 2018 was the rise in interest rates, which lead to a rise in the average vehicle payment. The largest price increase was tied to the average lease, making leases far less attractive than financing new or used vehicle purchases.
- Power and utilities outlook4: As the US power and utilities industry continues on the path to transformation, some recently developed regulatory initiatives are emerging that may bring new opportunities to utilities in 2019 and beyond. On the generation side, the three dominant trends for 2019 seem to be a continuation of recent years—that is, displacement of coal-fired generation, steady growth in natural gas, and rapid growth in wind and solar generation.
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1 Dickson, Duane. “2019 oil, gas, and chemicals industry outlook. Deloitte Consulting LLP, 2019
https://www2.deloitte.com/us/en/pages/energy-and-resources/articles/oil-gas-and-chemicals-industry-outlook.html?icid=inline_link_industryoutlook_oil_011516, accessed April 17, 2019.
2 Hopwood, Philip. “Tracking the trends 2019: The top 10 issues transforming the future of mining.” Deloitte Consulting LLP, 2019. https://www2.deloitte.com/us/en/pages/energy-and-resources/solutions/mining-industry-services-energy-and-resources.html?icid=top_mining-industry-services-energy-and-resources, accessed April 17, 2019.
3 Smoke, Jonathan. “Top Insights Shaping the Automotive Industry in 2019.” Cox Automotive, Inc. 2019. https://www.coxautoinc.com/learning-center/top-automotive-trends-2019/, accessed April 17, 2019.
4 Smith, Scott. “2019 power and utilities industry outlook.” Deloitte Consulting LLP, 2019. https://www2.deloitte.com/us/en/pages/energy-and-resources/articles/power-and-utilities-industry-outlook.html?icid=inline_link_industryoutlook_power_011516, accessed April 17, 2019.