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ANALYSIS: U.S. Auto Targets Draw Most M&A, Investment Since 2009

Dec. 22, 2020, 9:26 AM

In year of extreme deal trends, the automotive industry may be one to add to the winners list as far as M&A and investment dollars are concerned—a result owing in no small part to “EV mania” and other tech innovations in the sector. Automotive innovators, especially electronic vehicle manufacturers, have been particularly visible this year as targets of some of the hottest investment types of 2020: SPAC mergers and venture capital.

Year to date, the volume of global mergers and acquisitions deals and investments involving automotive manufacturers as targets is up 48.6% compared with 2019. And U.S. auto manufacturer targets have seen a remarkable $22 billion in M&A and investment volume in 2020, representing 59.6% of all global volume, and marking a 752.8% year-over-year increase in volume for this subset of deals. This amount represents the highest annual volume to be received by U.S. automotive sector targets since 2009.

This U.S. transaction volume is composed of a combination of takeovers and investments: $16.1 billion in M&A transactions resulting in control of the acquired company or assets, and $5.9 billion in various investment transactions, including minority stake purchases and venture capital investments (angel investments and all financing rounds from seed onward).

The role of innovation as a driver of M&A and investment activity in the automotive sector is evident from looking at the top 10 global transactions with the highest dollar value involving auto manufacturer targets in 2020: Four of these 10 deals involved electronic vehicle targets: Rivian Automotive Inc. ($2.5 billion VC funding round), Fisker Group Inc. ($1.9 billion SPAC merger), WM Motor Technology Co. Ltd. ($1.47 billion VC funding round), and NIO Holding Ltd. ($989 million investment). And two deals involved self-driving car targets: Apparate USA LLC ($4 billion acquisition), and Waymo LLC ($3 billion VC funding round).

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