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12/7/2007



Rail News: M&A

Mergers/acquisitions in global transportation market exceeding '06 levels, report says



There have been a number of mergers and acquisitions among transportation and logistics firms so far this year. So much so, M&A volume worldwide is on pace to exceed 2006 levels, according to PricewaterhouseCoopers' most recent quarterly report on M&A activity in the global transportation and logistics industry.

During 2007’s first three quarters, the value of M&A deals totaled $39 billion, far exceeding the deals totaling $27 billion that were consummated in the same 2006 period. Declining debt market liquidity and “stock market volatility felt by financial investors” helped spur dealmaking, PricewaterhouseCooper said.

While total deal value associated with passenger air firms declined in favor of rail acquisition targets in third-quarter 2006, passenger air activity through 2007’s first three quarters declined in favor of trucking targets. Meanwhile, shipping markets continued to be strong, particularly in the bulk cargo segment, because of high rates and stock prices, the report states.

Based on value, U.S. firms have been leading M&A targets for deals worth more than $50 million through 2006 and 2007’s first three quarters, while the value of Asia Pacific acquisition targets declined.

“The pace of M&A activity in the transportation and logistics industry has not abated, and we anticipate that it is going to continue as a result of the current global environment," said Ken Evans, PricewaterhouseCoopers’ U.S. transportation and logistics sector leader, in a prepared statement.


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