Auto Suppliers to Make Fewer, Bigger Acquisitions

Auto parts makers are likely to agree to about 270 acquisitions worldwide this year compared to a record 303 deals in 2011, according to PricewaterhouseCoopers LLP.

But the consulting firm expects the combined value of transactions in 2012 to surge 57% to about $16 billion. PwC predicts Chinese companies will be involved as buyers or sellers in more than half the transactions.

The firm says the industry's push to improve fuel economy and reduce emissions will result in more M&A deals by suppliers seeking access to technologies to meet those goals.

Fewer than one in five suppliers is now considered financially unstable compared with more than 50% in early 2009, the study notes. Most of the shaky parts makers are in Europe. PwC expects bankruptcies of such companies to increase this year.