Stock markets are reacting much more favorably to mergers and acquisitions (M&A) among automotive suppliers than to M&A in other industries. Shares in the automotive supply industry often rose the moment strategic corporate transactions were announced.
This is true of both national and international mergers, as the Oliver Wyman study “Mergers and Acquisitions in the Automotive Supply Industry” shows. Tier 1 suppliers in particular should upshift with regard to M&A, as globalization forces auto manufacturers to raise the bar and pressures Tier 1 suppliers to quickly achieve critical mass. However, the M&A process also presents enormous challenges to auto suppliers. Clear strategies and efficient post-merger integration are prerequisites for a successful transaction.
