T&L Mergers & Acquisitions Hot in Second Quarter

Extracted 05AUG2011 from http://mhlnews.com/global/mergers-acquisitions-hot-second-quarter-0804/

Mergers and acquisitions in the transportation and logistics industry (T&L) jumped nearly 15 percent in the second quarter of 2011 compared to the same period of 2010, according to Intersections, a quarterly analysis of global merger and acquisition (M&A) activity in the transportation and logistics industry [see http://www.pwc.com/us/en/industrial-products/publications/intersections.jhtml]

For deals worth $50 million or more, there were 47 announced transportation and logistics deals worth $13.5 billion in the second quarter of 2011, with six more deals than in the same period of 2010. While deal value decreased from $18.4 billion in the second quarter of 2010, value was up approximately 30 percent from $10.4 billion from the first quarter of 2011. For the first six months of 2011, there were a total of 92 announced deals worth $50 million or more, putting deal activity in T&L on track to meet 2010 levels, according to PwC...

While shipping and passenger air deals drove the majority of deal value in the second quarter, accounting for 65 percent of deals worth $50 million or more, continued interest and activity in transportation infrastructure remains a key driver for M&A in the sector...

According to PwC, the relative fragmentation of the transportation and logistics sector in emerging markets is due to companies’ focus on building domestic scale before entering the global marketplace.

...one of the most significant concerns in the industry continues to be corruption, an issue particularly heightened during a robust period of M&A activity, according to PwC... According to PwC, factors that transportation and logistics companies need to consider include vetting third parties, determining the appropriate level of due diligence, and building strong compliance efforts on Foreign Corrupt Practices Act (FCPA) regulations.