Automotive M&A got off to a modest start in 2019. Total deal value in Q1 2019 was $15.5 billion, down 43% from Q1 2018. Deal volume also dropped 30% from the comparative quarter, with 201 deals in Q1 2019. Limited megadeal activity greatly contributed to the decline in deal value—for example, excluding megadeals, average Q1 2019 deal size was $146 million, down only 9% from the 2018 average disclosed deal value ($161 million) and up 29% from the 2017 average disclosed deal value ($113 million). Certain macroeconomic factors played a role this quarter including continued uncertainty over trade deals between the US and China, as well as a no-deal Brexit. However, deal fundamentals remain strong and valuations high, as automakers and suppliers remain focused on strategic investments in the technologies and compete for a smaller pool of assets.
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