Despite a number of prominent deals recently closing, the Covid-19 crisis has seen the defence industry shy away from mergers and acquisitions to safeguard cash and see themselves through the pandemic.

At the start of last month, Raytheon and United Technologies completed their merger and began trading as a single company. Despite this blockbuster M&A, like many industries, defence has seen a slow down in deal activity

Duff & Phelps M&A Advisory managing director Paul Teuten told Army Technology: “The current situation has caused quite a few actions to pause or be put on hold, or decisions to be deferred. Whether they continue rather depends on if it was the beginning of the transaction or the end of the transaction .”

“Clearly, in these market conditions, buyers tend to be very cautious and so the closer we are to a discussion about value, the harder it is to bridge the gap between buyer and seller.

“The bright spot is the defence industry, which is demonstrating its trading resilience; it’s not that its businesses are not impacted (they are – as companies respect government regulations to protect employee safety), but revenues are typically holding up as the end customers are often government bodies and furthering national security with budgets unchanged.”

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