Navigating amid uncertainty: Q4'24 M&A trends in IM

In Q4’24, industrial manufacturing (IM) M&A remained largely steady. This year, despite potential disruptions from tariffs, supply chain issues, and interest rate fluctuations, we expect the deal pace to stay strong. In the automotive sector, legacy auto OEMs and suppliers will likely consolidate, driven by the shift toward electric vehicles, overcapacity, and the need to derisk portfolios. In the aerospace and defense sector, companies will likely pursue strategic deals in growth areas like autonomous systems, AI, cybersecurity, and space, while also addressing supply chain issues and government policies favoring domestic production. Additionally, private equity interest in the aerospace and defense sector is expected to continue growing, particularly in defense tech and dual-use technologies.

Q4’24 highlights and key insights:

• IM M&A remained steady in Q4 2024, with deal value rising about 7 percent to $83.5 billion despite an 11.6 percent dip in volume compared to Q3.
• More strategic acquisitions in ground transportation are likely as manufacturers focus again on the domestic market due to geopolitical winds.
• In defense, geopolitical tensions will likely drive bigger budgets and M&A activity, particularly in emerging technologies.

Download our full report, Navigating amid uncertainty: M&A trends in industrial manufacturing , to gain deeper insights into the IM M&A landscape. Learn how KPMG can help you deliver value across the deal lifecycle with our industry expertise and end-to-end M&A capabilities.