Key View: For the remainder of 2024, we anticipate an increase in the number of mergers and acquisitions (M&A) deals in the transport sector, driven by the acquisition of smaller players. However, average deal values are expected to be smaller. Larger companies will continue acquiring to enhance their reach and efficiency, and adapt to near-shoring and broader supply chain shifts, while smaller players face tough financial conditions.
Mid-Year Update: In H1 2024, the global transport sector recorded 137 M&A deals with an average value of USD62.2mn per deal, marking an 81.9% drop from the average half-yearly deal values of USD344.2mn seen in 2021 and 2022, according to Bloomberg. This trend of increasing M&A deals but shrinking deal values is evident across maritime, road, rail and air transport. Larger companies acquiring smaller, financially struggling players drive this pattern, which is expected to persist throughout 2024. In H1 2024, the maritime sector dominated M&A activity, accounting for 63.9% of deal value. According to Bloomberg, larger players like Maersk and Cosco reported strong financial rebounds, with Maersk’s net profits up 145.6% to USD208mn and Cosco’s profits increasing by 277.6% to USD1.1bn in Q1 2024 from Q4 2023 levels.
Geopolitical events in the Red Sea pushed freight rates up due to closed traditional shipping lanes and increased risks. This situation benefited larger freighters who managed extra mileage and fuel costs effectively, unlike smaller operators who faced rising operational costs and could not easily capitalise on higher freight rates. Consequently, companies like ADNOC Logistics & Services, which acquired Navig8 Topco Holdings Inc, and MSC Mediterranean Shipping Co SA, which acquired Gram Car Carriers ASA, have been acquiring smaller operators to enhance efficiency and scale throughout H1 2024.