Aerospace M&A Nears Record as Jet Production Schedules Stabilize

Mergers and acquisitions within the aerospace supply chain are accelerating to near-record levels, fueled by clearer production schedules from Boeing and Airbus that have given buyers more confidence in long-term demand. The surge in dealmaking follows a period of pandemic-induced uncertainty that had previously stalled transactions.

Deal Volume Approaches Pre-Pandemic High

Through August, there have been 154 publicly disclosed commercial aerospace transactions, according to data from aerospace and defense investment bank Janes Capital Partners. This figure is just shy of the annual record of 159 deals set in 2019.

While the volume of deals is high, the total value is more moderate compared to some previous years. The deals announced through August had a combined value of $14 billion, compared with 157 deals worth $37.5 billion for all of last year, Janes Capital data showed. Recent high-profile acquisitions include GE Aerospace's $12 billion purchase of castings supplier Consolidated Precision Products.

Production Stability Boosts Buyer Confidence

The M&A rebound is closely tied to the stabilization of aircraft build rates. After years of volatility that saw its deliveries fall from 806 jets in 2018 to 157 in 2020, Boeing delivered 600 aircraft last year and is on pace to exceed that number this year, according to a Reuters report. Airbus has also seen a steady production increase and aims to deliver a record 870 jets this year.

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This predictability allows buyers to more accurately value a target company's future performance. "You could index the rate of increase in build and the rate of increase in deals, and it’ll track pretty closely," Anita Antenucci, founder of investment bank 3Wire Partners, told Reuters. This renewed clarity is also bringing a backlog of sellers to the market after many private equity firms held onto assets during the uncertain pandemic years.

Competition Intensifies for Key Suppliers

Acquirers are targeting companies with specialized manufacturing capabilities, available capacity, and, critically, a skilled workforce—a scarce resource amid industry-wide labor shortages. "There was no way a buyer — or you — had any idea what your revenues were going to be," Stephen Perry, managing director at Janes Capital, told Reuters, explaining the previous valuation challenges.

This dynamic has intensified competition for desirable assets. For example, France-based DEMGY acquired Tool Gauge, a midsized supplier of jetliner interior parts, betting on a Boeing turnaround before a bidding war could emerge. The scramble extends to smaller firms, with Susan Kasa, owner of a small machine shop, telling Reuters she now fields "two to three calls a day" from prospective buyers interested in her trained workforce.