Dive Brief:
- Mergers and acquisitions in the logistics and freight industries are lagging slightly as the effects of uncertainty powered by the U.S. election, Brexit, and the Chinese economic slowdown take hold.
- Third quarter mergers and acquisitions in the global transportation and logistics sectors were slightly lower than in previous months, according to PricewaterhouseCoopers, Logistics Management reported Thursday.
- In the U.S., mergers and acquisitions in the freight sector has also been on the decline but saw a boost this week with two deals — among Pilot Freight Services and two investment firms, as well as between TTS and Sunteck Transport Group — giving hope for an end to the M&A drought, the The Wall Street Journal reports.
Dive Insight:
The global and national slowdown in logistics sectors M&As is mainly due to a weakened freight market affecting companies' cash equivalents as many businesses work to mitigate and restructure rather to expand. The PricewaterhouseCoopers report and Wall Street journal observations on the number of M&As support the analysis.
Yet, M&As are not always driven by expansion needs and slowing markets may drive a pickup in deal-making as company buyouts become attractive. The PricewaterhouseCooper report notes investment firms are increasingly actors in the deals, as companies prefer to restructure thanks to capital injections than be acquired altogether.
As the market contracts, so does many company's ability to close deals. But the companies that do make deals are likely to reap great rewards if the market turns around.
