More mergers seen in U.S. defense space

June 25 - Reuters (U.K.) - Italian defense manufacturer Finmeccanica SpA's recent $4 billion acquisition of U.S. defense company DRS Technologies Inc was a big one, but it is not the last one.

More European defense manufacturers looking to gain a presence in the U.S. defense market -- the world's largest -- will likely be targeting U.S. defense suppliers.

Increasing acquisition activity is also expected within the domestic defense sector as suppliers consolidate to become one- stop shops for manufacturers such as Boeing Co, Lockheed Martin Corp and Northrop Grumman Corp. Read More.

Market Outlook: Composites in General Aviation

One assumption is that aircraft construction is a boom/bust market. But current order backlogs and resulting ramp-ups in production rates indicate that civil aircraft manufacturers are looking ahead with a great deal of confidence. Expected long-term growth in Asian and other developing economies accounts for a large proportion of the recently placed aircraft orders. As a result, many manufacturers already have backlogs amounting to several years of production for popular models. While some observers argue that the aircraft industry, as a result, has entered a “super cycle” or “a bubble,” investment banking advisor Trevor Bohn takes a slightly different view. A vice president at RSM EquiCo Capital Markets, Bohn said at COMPOSITESWORLD Conferences’ 2008 Composites Industry Investment Forum held in February that he preferred to describe the market as “stronger for longer.” With the growing number of aircraft orders and a resulting build up in aircraft delivery backlogs, the market for composite aerostructures in general aviation has been growing rapidly. According to the General Aviation Manufacturers Assn.’s recently released 2007 year-end statistics, the industry grew 16.5 percent to a record $21.9 billion in aircraft shipments, compared to 2006. Read More.

The drive for growth: M&A activity in the aerospace and defence sector

February 13 - Jane's Information Group - The total value of mergers and acquisitions deals in the aerospace and defence sectors worldwide remained buoyant - albeit broadly static - during 2007: USD28.86 billion compared with USD28.69 billion for the previous 12 months.

Perhaps more significantly, deal volume was strong. Jane's M&A database registered 185 deals during the year, up from 132 deals in 2006. Analysts point to interest in the sector from private equity firms and strategic investors, which went head to head in pursuit of deals; competition that - in many cases - served to drive up value.

Global M&A activity in 2007 was - once again - strongly centred on the United States. Of the USD28.86 billion invested, Jane's figures show that USD20.9 billion was invested in the US. This is compared to USD19.4 billion in 2006. Read More.

Mergers Could Ignite Airline Stocks

August 28 - Forbes - Could the airline sector be taking off soon?

With key players in the industry looking to consolidate, the fall may bring traders' money and headlines to an industry dogged by high fuel prices.

Although he does not believe any deals are imminent, Calyon Securities analyst Ray Neidl said in a research note that the market may start to factor merger considerations into stock prices. Read More.

The Right Stuff

August 21 - ThomasNet Industrial Newsroom - Apathy, budget cuts and growing global competition ... despite a number of concerns, the worldwide aerospace and defense market is on track to grow by more than 19 percent by 2011.

And “as airline profitability improves, OEMs steadily raise delivery schedules and supply chain businesses see strong levels of shipments to Airbus and Boeing,” the outlook for the A&D sector “remains extremely attractive thus far in 2007,” investment firm RSM EquiCo Capital Markets noted in April.

Meanwhile, merger and acquisition activity in the A&D sector continues to rise, as "strategic and financial players gain confidence in the long-term stability of the commercial build-cycle and bipartisan defense spending,” according to RSM EquiCo’s Q2 Aerospace & Defense Review. Read More.