May 19, 2020

GM invests $170mn in Ontario factory conversion

General Motors
autonomous vehicles
gor goz
2 min
GM invests $170mn in Ontario factory conversion

General Motors (GM) is to invest $170mn in its Oshawa, Ontario facility in order to transition the factory into an “aftermarket plant” as well as an autonomous vehicle test track.

As The Star reports, GM had initially announced that the plant would be closing, but it is now to remain open under its new remit. The plant will serve as a stamping facility, producing parts for GM vehicles, with the company saying that they hope to eventually produce parts for other manufacturers as well.

GM Canada CEO Travis Hester said in a press conference that he was “pleased to make the announcements today to underscore our long-term partnership and commitment to Oshawa’s sustainable future.”

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Aside from the plant, the investment will pay for a test track for autonomous vehicles. Automotive News Canada reports that this will complement facilities GM already has in Oshawa and Markham, Ontario which develop both software and hardware for autonomous vehicles. Hester said that “we need to be able to [test] software algorithms in a safe way, and the test track is a perfect place.”

GM have said that the test track itself will spread over 55 acres, comprising two 1200ft long straights connected by banked curves.

The move takes place against a background of the industry trend towards gradually phasing out traditional vehicles in favor of self-driving and electric varieties.

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May 15, 2021

M&A activity key lever for future tech sector growth

Technology
dealmaking
EY
M&Aactivity
Kate Birch
2 min
With M&A activity in the technology sector soaring, dealmaking is likely to be the key lever for growth as businesses look to recover post-pandemic

Despite the continuing uncertainty of the pandemic, the tech sector has witnessed soaring dealmaking activity over the past year, rocketing in the second half of 2020, with the last quarter of 2020 a record one for M&A activity, and momentum continuing into 2021.

Dealmaking in tech sector soars in past year

And the latest figures bear this out with the number of technology M&A deals totalling US$208.44bn globally in Q1 2021, according to GlobalData. While the US holds top spot both in volume of deals (1034) and total value (US$140.61bn), Europe ranked next with 649 deals (US$44.49bn) with the UK continuing its reign as Europe’s biggest M&A market with 204 deals.

In particular, megadeals – those valued at US$5bn or more – soared in 2020 representing 59% of all global technology sector deal value in 2020, up from 47% in 2019, according to the latest edition of the EY Technology Global Capital Confidence Barometer.

This tech sector trend towards megadeals is backed up by EY’s CCB data, with 16% of tech sector respondents planning to pursue transformative deals valued at US$5bn or more in the near-term.

While technology deal activity “all but stopped at the beginning of 2020 after fluctuating between historic highs and lows, companies pivoted quickly and tech M&A exploded in the second half of the year”, says Barak Ravid, EY Global TMT Leader for Strategy and Transactions. 

M&A activity level for tech sector growth

Looking ahead to the future, technology executives are optimistic, with nearly half (47%) expecting profitability to fully rebound this year, according to CCB data, compared to 23% across all sectors, and with more than half (51%) planning to pursue M&A in the next year in order to sustain growth.

According to Ravid, M&A activity is increasingly becoming a key lever for growth as businesses look to recover.

“To position themselves for future revenue growth, tech companies are now adjusting their M&A strategy to focus more on a target’s business resilience, digital technology alignment and to gain market share through consolidation,” says Ravid.

However, with an increasingly competitive deal market and ongoing geopolitical tensions, the majority of tech execs expect to see more competition in the bidding process for assets over the next year, primarily from private capital.

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