DETROIT -- Automotive merger and acquisition activity again remained low in 2010 despite stronger balance sheets in the recovering sector, according to a PriceWaterhouseCoopers analysis released this week.
The number of deals totaled 521, compared with 532 last year. But the disclosed dollar value dropped to the lowest level in five years at $29.4 billion. In 2009, government bailouts made up more than $82.4 billion of the $121.9 billion value of deals.
Although interest in auto deals grew, a limited access to capital, heightened risk and still-stressed balance sheets forced buyers to concentrate on smaller transactions, the report said.
Most deals focused on expanding geographic footprints, Paul Elie, U.S. automotive transaction service leader for PriceWaterhouseCoopers, said in a release.
"Globalization is a motivating factor behind recent and pending transactions," Elie said in the release. "Automotive companies are investing in strategic deals aimed at broadening their geographic footprint and/or strengthening their technology portfolio, enhancing their ability to compete globally."
Buyers from Europe represented 46 percent of deals in 2010. Most involved doing business in Asia, where values totaled to $11 billion, compared with $2 billion in 2009.
M&A activity originating from the U.S. accounted for only 84 deals last year.
However the report calls for increased activity moving forward, because private equity firms are sitting on $200 billion and automakers and suppliers continue to increase profits, the report said.