Deals in the global industrial manufacturing sector slowed in the third quarter 2008, according to the recent PricewaterhouseCoopers’ report, Assembling Value: Industrial Manufacturing Mergers &Acquisitions Analysis -Third Quarter 2008.
 
The number of third-quarter deals with a value of at least $50 million will not match last year’s level of 207, but will approach the number announced in 2006, 169. The total value of deals announced in the third quarter, $35 billion, is behind last year’s $88 billion at this time. This is due to a drop in large deals of more than $1 billion. Tight credit markets are mostly to blame for the decline in large-deal volume.
 
Interest in industrial machinery targets continued to lead activity in industrial manufacturing M&A, making up 42% of deals announced in the first nine months of 2008. Movement in this area can be attributed to high levels of fragmentation in the industry. Middle-market announcements drove improvements in deal values in Rubber and Plastic Products, and Electronic and Electrical Equipment segments.
 
The average deal value overall was $277 million, down from $425 million last year. No deals valued at more than $1 billion were announced in the third quarter; four large deals have been announced since the beginning of the year. Middle-market deals (defined as deals between $100 million and $1 billion) continued, with 25 announced in the third quarter.
 
Regionally, Asia and Oceania, UK and Eurozone, and North America led as target markets, making up 87% of all deals by number and 89% of deals by value. China continues to experience consolidation in the industrial manufacturing industry.