The reduction in deal appetite is more likely a pause than a full stop. We may see fewer deals in the near term, and the next 12 months will likely not be as strong as the last 12. But M&A remains a strategic tool for growth. For now, regulation and trade policy uncertainty is giving some executives pause for thought, as is the need to fully integrate and properly digest acquisitions made to date.
Heightened risks of disruption, increasing policy uncertainty accelerating portfolio reviews
In an era of rapid technological disruption, geopolitical tension and policy uncertainty, transportation executives indicate they are accelerating their portfolio reviews in order to prepare for medium- to long-term growth. Transportation companies have increased the frequency of their portfolio reviews, citing the threat to their business from digitally enabled competitors and startups, as well as increasing pressures from investors to maintain or improve margins. In addition, potential changes to global trade policies are becoming an increasingly pressing issue in company boardrooms.
Transportation companies are planning to sell underperforming or at-risk assets in order to raise capital to invest in the right technologies and right geographies. Executives are looking to identify strategic gaps in their portfolio. Unless these gaps are filled, many companies may find themselves at a competitive disadvantage. Understanding the full breadth of their competitive ecosystem is more critical than ever.
Cross-border deals undeterred by political uncertainty and geopolitical tensions
With global trade and tariff policy becoming more uncertain, transportation executives are still planning cross-border deals to counter negative impacts on their operations, gain access to new markets and protect supply chains. For transportation companies, dealing in a globalized market is a necessity, and executives should remain agile in their approach to geopolitical disruption and be prepared to reimagine their global footprint.