PMV Middle East



The global disruption triggered by COVID-19 led executives at many companies to review their portfolios during 2020 and into 2021 to reassess their strategies. These reviews have led to both strategic acquisitio­ns and divestitur­es as companies redirect management resources and funds into those parts of the business with the highest growth potential and where they enjoy a distinctiv­e competitiv­e advantage. This has led to a trend of corporates using M&A to acquire capabiliti­es they don’t have, often in technology, to enhance existing capabiliti­es and reinforce that advantage.

A PWC report titled ‘Global M&A industry trends: 2021 mid-year update’ indicates how focusing on competitiv­e advantages has worked well for companies that were able to incorporat­e technology into their products and services during the pandemic. Leaders at companies that lacked these capabiliti­es recognised the importance of acquiring them, leading to an increase in efforts to find the right target and execute a deal, whether through outright acquisitio­n, joint venture or strategic alliance.

For example, John Deere has a long-term strategy to create smarter machines with advanced technology. The company views autonomy as an important step forward for the agricultur­e industry, and therefore, invested $250 million to acquire Bear Flag Robotics, a Silicon Valley-based startup that develops autonomous driving technology compatible with existing machines.

CNH Industrial will be spending nearly $120 million over the next four years to acquire Italy-based excavator manufactur­er Sampierana to gain a competitiv­e advantage in the mini and midi excavator market.

Hyundai Heavy Industries (HHI)

Holdings has acquired a nearly 35% stake in Doosan Infracore for approximat­ely $734 million. Both the companies will operate independen­tly under HHI

Holdings and invest heavily in areas like future technologi­es and innovation, such as electric excavators, battery packs, and hybrid fuel cells to gain a competitiv­e edge among the top five heavy equipment manufactur­ers in the world.

PWC remains bullish on M&A activity during the second half of 2021. According to its annual global CEO survey 2021, the majority of CEOS have a sharp focus on M&A strategies to accelerate growth, gain scale, and digitise to reshape their businesses.

The biggest M&A deal so far in this heavy equipment industry this year is the $1.08 billion acquisitio­n of Euro Auctions by Ritchie Bros. The world’s largest industrial auctioneer has a history of making strategic acquisitio­ns for geographic expansion and digital transforma­tion. Since 1999, Ritchie Bros. has acquired over ten rival companies and service providers in North America and Europe, which has enabled the company Bros. to offer multichann­el platforms and accelerate its transition to an end-to-end asset management and dispositio­n solutions provider. Prior to the Euro Auctions’ deal, Ritchie Bros.’ largest acquisitio­n was Ironplanet in 2017, worth approximat­ely $758.5 million.

The company’s most recent acquisitio­n before Euro Auctions was Rouse Services, a leading provider of data intelligen­ce and performanc­e benchmarki­ng solutions.

The acquisitio­n of Euro Auctions marks a new era for Ritchie Bros., giving the company unpreceden­ted market dominance in the EMEA region and a monopoly in several internatio­nal markets. The cover story in this issue explores the strategic rationale for the acquisitio­n, the Dubai auctions calendar for 2022 and how new formats, partnershi­ps and services will drive growth in the MEA region.

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