The dealmakers are back.
In the wake of ZF's $13.5 billion acquisition of TRW Automotive, other merger and acquisition deals are bubbling up with small and midsize European companies as acquisition targets.
Delphi Automotive reportedly wants to sell its thermal products division, and key semiconductor suppliers have been buying smaller competitors.
If you add it all up, automotive suppliers are expected to close 211 deals this year, up 13 percent over 2013.
That projection comes courtesy of PricewaterhouseCoopers, which published a report in October on automotive mergers and acquisitions. PwC extrapolated that forecast from the number of deals completed in the first six months of the year.
According to the report, North American suppliers are the most active consolidators. Forty-seven percent of the dealmakers are North American, while 30 percent are European. The remainder is from China, Japan and South Korea.
Meanwhile, the acquisition targets tend to be small and midsize European companies.
"The American suppliers are the healthiest in the industry right now," said Dietmar Ostermann, a senior partner at PwC.
Now that the interiors industry has undergone a spate of consolidations, Ostermann expects the next round of deals will target suppliers of powertrain, chassis and exterior components.
Suppliers are eager to acquire companies that have cutting-edge technology. The dealmakers "are looking at some interesting technology plays," Ostermann said.
Most of the acquisitions have been relatively small -- averaging $58 million -- rather than megadeals like ZF's acquisition of TRW.
Private equity investors are regaining their interest in the auto industry. During the past 12 months, Wall Street accounted for 22 percent of the acquisitions, up from 10 percent in previous years, according to PwC.