Global consultancy PwC has released the newest edition of its quarterly analysis of mergers and acquisitions (M&A) in the global transportation and logistics (T&L) sector.
The analysis covers all T&L transactions worth $50 million or more, across passenger air, passenger ground, shipping, logistics, trucking and rail industries.
54 deals were announced in Q1 2015, representing a slight decline from the 62 deals in Q4 2014. However, while fewer deals are being announced, the deals tend to be larger, with overall T&L deal value increasing by €5.3 billion. This figure was primarily driven by ‘megadeal’ activity, such as the Japan Post acquisition of Australia's Toll Holdings for €4.7 billion.
According to the report, “five megadeals accounted for almost 55 per cent of the value of all deals valued at $50 million or more in Q1 2015”.
Asia and Oceania contributed the majority of T&L deals in the first quarter, accounting for 33 per cent of deals and 41 per cent of value. This was reportedly driven through local deals in China, as the country works toward consolidating its infrastructure and transportation network to compete with non-Chinese companies.
“As the middle class continues to grow in these emerging economies, we see an increased demand for improved transportation systems, infrastructure improvements and logistics services to move people and goods,” the PwC analysis stated.
“Emerging economies such as China can be expected to continue to contribute to the M&A deal environment in the foreseeable future.”
The analysis also showed that while 17 per cent of all T&L deals in Q1 were in trucking, the figure was a decline from the 20 per cent shown in Q4 2014.
“However, when looking at all deals… trucking remains the largest activity in the sector, followed by logistics. This is unsurprising given the fragmentation of these industries and the prevalence of smaller players that are ripe for consolidation as bolt-on acquisitions.”
PwC expects to see logistics transactions continue to grow in the coming months, driven by a decline in fuel costs and megadeals like the FedEx acquisition of TNT Express to be accounted for in Q2.