Aerospace M & A Market Size & Share Analysis - Growth Trends & Forecasts (2025 - 2030)

Mergers And Acquisitions (M&A) In Aerospace And Defense Market Analysis

The Mergers And Acquisitions In Aerospace And Defense Market size is estimated at USD 218.02 billion in 2025, and is expected to reach USD 381.82 billion by 2030, at a CAGR of 11.86% during the forecast period (2025-2030).

The aerospace and defense mergers and acquisitions landscape has undergone significant transformation, shifting away from traditional megamergers focused on cost savings toward strategic acquisitions aimed at product innovation and global market expansion. This evolution reflects broader industry trends, with Lazard's Aerospace and Defense Investment Banking Group reporting 148 M&A transactions announced as of May 2022. The industry's strategic focus has particularly intensified on supply chain resilience and technological advancement, with companies increasingly pursuing targeted acquisitions to secure critical capabilities and minimize disruption risks.

The market dynamics are being reshaped by the growing influence of private equity firms in aerospace M&A activities. Private equity transactions in the United States alone totaled USD 19.3 billion by the end of June 2022, demonstrating the sector's attractiveness to institutional investors. These investors are adopting more innovative approaches to capital deployment, including longer-term investment horizons, particularly in areas experiencing rapid technological advancement and market disruption. This trend is fostering a more diverse and competitive M&A environment, with private equity firms playing a crucial role in industry consolidation and technological innovation.

Cross-border transactions have emerged as a significant trend in the aerospace and defense mergers and acquisitions landscape, with US companies engaging in transactions worth USD 1.2 billion in the first half of 2022. Notable transactions include Airbus Helicopters' acquisition of German-based ZF Luftfahrttechnik in January 2023, strengthening their position in helicopter dynamic components and MRO services. These international deals reflect a broader industry strategy to enhance global market presence, access new technologies, and strengthen supply chain resilience across different geographical regions.

The industry is witnessing a strategic shift toward smaller, technology-focused acquisitions aimed at enhancing capabilities in emerging technologies and digital transformation. This trend is exemplified by recent transactions such as Abu Dhabi's ADQ combining four aviation companies to create a global firm with assets of USD 2.6 billion in October 2022, focusing on integrated maintenance, repair, and overhaul services. Companies are increasingly prioritizing acquisitions that provide access to advanced technologies in areas such as autonomous systems, artificial intelligence, and cybersecurity, reflecting the industry's evolution toward more sophisticated and digitally-enabled solutions. This strategic focus is indicative of the growing aerospace and defense market size and its potential for future growth.

Mergers And Acquisitions (M&A) In Aerospace And Defense Market Trends

Growing Focus of Aerospace and Defense OEMs on Business Expansion through Mergers and Acquisitions

The aerospace companies and defense sector has witnessed a significant transformation in its approach to aerospace acquisitions, shifting from traditional megamergers focused on cost savings to strategic acquisitions aimed at expanding product portfolios and global market presence. This evolution is evident in recent major aerospace and defense transactions, such as BAE Systems PLC's acquisition of Ball Aerospace for USD 5.5 billion in February 2024, which significantly enhanced their space and defense capabilities through the new Space and Mission Systems division. Similarly, Parker-Hannifin Corporation's acquisition of Meggitt PLC for approximately GBP 6.3 billion has enabled the expansion of their aerospace portfolio with advanced defense and aerospace technologies, demonstrating the industry's focus on technological advancement through strategic acquisitions.

The industry has also witnessed a surge in strategic mergers aimed at innovation and market expansion, as exemplified by the March 2024 merger between XTI Aircraft Company and Inpixon to form XTI Aerospace Inc., focusing on revolutionary private air transportation solutions. This trend extends to specialized technological acquisitions, as demonstrated by THALES's USD 1.1 billion acquisition of Cobham Aerospace Communications in February 2024, which aims to advance connected cockpit technologies. These strategic moves reflect the industry's shift towards acquiring smaller players with niche capabilities to enhance technological expertise and reduce supplier dependence, ultimately strengthening their competitive position in the global market.

Governmental Policies Encouraging Growth in the Market Studied

Government initiatives worldwide are actively reshaping the aerospace and defense industry landscape by implementing policies that promote domestic manufacturing capabilities and international collaboration. In response to rising global tensions and supply chain vulnerabilities, democratic governments are introducing comprehensive policies to strengthen national defense manufacturing capabilities, particularly focusing on Tier 2 and 3 suppliers rather than just OEMs. These policies have led to increased opportunities for cross-border industrial cooperation, especially in Europe, where common security concerns have fostered greater collaboration among nations in defense manufacturing and technology development.

The impact of governmental support is particularly evident in emerging markets, where policies are being formulated to encourage foreign defense manufacturers to collaborate with local companies and establish subsidiaries. For instance, the Indian government has implemented policies to promote the indigenization of defense production, resulting in the approval of 45 companies/joint ventures operating in the defense sector with foreign OEMs. These initiatives are complemented by various governments' focus on forming strategic alliances to accelerate technological advancement and economic growth, while simultaneously addressing supply chain vulnerabilities through policies that encourage shorter, more resilient supply chains and stronger national capabilities in defense manufacturing.

Segment Analysis: Sector

Defense Segment in Mergers and Acquisitions (M&A) in Aerospace and Defense Market

The defense segment continues to dominate the global aerospace and defense M&A market, holding approximately 51% market share in 2024. This significant market position is driven by increasing cross-border conflicts, rising terrorism concerns, and growing political disputes among neighboring countries, which have led to an enhanced focus on strengthening defense capabilities worldwide. The segment's prominence is further reinforced by substantial defense budget allocations from major powers and the strategic importance of acquisition in the defense industry. Key players in the defense sector are actively pursuing M&A in defense to expand their technological capabilities, particularly in areas such as unmanned systems, cybersecurity, and advanced weapons systems. The defense segment's robust performance is also supported by governmental policies encouraging domestic defense manufacturing capabilities and the consolidation of defense industrial bases across major markets.

Aerospace Segment in Mergers and Acquisitions (M&A) in Aerospace and Defense Market

The aerospace segment is demonstrating remarkable growth momentum in the M&A landscape, with an anticipated growth rate of approximately 14% during the forecast period 2024-2029. This accelerated growth is primarily driven by the increasing focus of aerospace companies on acquiring start-ups and innovative technology firms to enhance their product portfolios and technological capabilities. The segment's growth is further fueled by the rising demand for commercial aviation, the expansion of maintenance, repair, and overhaul (MRO) capabilities, and the growing emphasis on sustainable aviation technologies. Strategic mergers in aerospace in the aerospace sector are increasingly targeting companies specializing in electric propulsion, advanced materials, and digital technologies, reflecting the industry's shift towards more sustainable and technologically advanced solutions. The segment is also witnessing significant M&A activity in the space technology domain, as companies seek to capitalize on the growing commercial space market opportunities. This reflects the overall expansion of the aerospace and defense market size.

Mergers And Acquisitions (M&A) In Aerospace And Defense Market Geography Segment Analysis

Mergers and Acquisitions in the Aerospace and Defense Market in North America

North America continues to dominate the global aerospace and defense market size, commanding approximately 63% of the global market share in 2024. The region's prominence is largely attributed to the presence of major aerospace OEMs and their extensive supplier networks across the United States and Canada. The mature and fragmented nature of the A&D sector in this region has created an environment where several global and regional players actively pursue aerospace mergers and acquisitions. The focus has notably shifted from megamergers towards targeted acquisitions that deliver new products and technological capabilities. The region's robust defense infrastructure and continuous technological advancement initiatives have made it particularly attractive for tier suppliers looking to penetrate the market through aerospace and defense M&A activities. The presence of stringent regulatory frameworks and sophisticated financial markets further facilitates structured deal-making processes. Additionally, the strong emphasis on supply chain sustainability and adaptation to geopolitical changes has made M&A an essential tool for industrial transformation in the region.

Mergers and Acquisitions in the Aerospace and Defense Market in Europe

The European aerospace and defense M&A market has demonstrated remarkable resilience and growth, achieving an approximate 15% annual growth rate from 2019 to 2024. The region's M&A landscape is characterized by a well-established aviation and defense sector, supported by the presence of industry giants like Airbus SE, BAE Systems, and Thales. The European market has witnessed a strategic transformation in recent years, with companies increasingly focusing on consolidating supplier bases to enhance operational efficiency. The region's unique political and economic framework, particularly within the European Union, has created opportunities for cross-border collaborations and strategic partnerships. The presence of advanced research and development capabilities, coupled with strong governmental support for defense modernization initiatives, has made European companies attractive targets for strategic acquisitions. The market has also seen increased activity in emerging sectors such as space technology, drone systems, and cybersecurity, driving further aerospace M&A deals.

Mergers and Acquisitions in the Aerospace and Defense Market in Asia-Pacific

The Asia-Pacific region represents one of the most dynamic markets for aerospace and defense M&A activities, with a projected growth rate of approximately 12% from 2024 to 2029. The region's M&A landscape is characterized by increasing investments in both civil aviation and defense sectors, driven by rising air passenger traffic and growing defense modernization programs. The market dynamics are shaped by the presence of emerging economic powerhouses like China and India, which are actively pursuing self-reliance in aerospace and defense capabilities. The region's strategic importance in global trade and security has attracted significant attention from international players looking to establish or expand their presence through strategic acquisitions. Local companies are increasingly seeking partnerships and acquisitions to enhance their technological capabilities and expand their market presence. The trend towards indigenous development of aerospace and defense capabilities has created numerous opportunities for technology-focused acquisitions and strategic partnerships.

Mergers and Acquisitions in the Aerospace and Defense Market in Latin America

The Latin American aerospace and defense M&A market exhibits significant potential for growth, driven by increasing modernization efforts in both civil aviation and military sectors. The region's market dynamics are characterized by a growing focus on enhancing domestic aerospace and defense capabilities through strategic partnerships and acquisitions. Countries like Brazil, Mexico, and Chile are leading the transformation by actively pursuing policies that encourage technology transfer and industrial cooperation through M&A activities. The market has witnessed increased interest from international players looking to establish regional manufacturing and maintenance capabilities. The growing emphasis on developing indigenous aerospace and defense capabilities has created opportunities for strategic acquisitions, particularly in areas such as aircraft maintenance, repair, and overhaul (MRO) services. The region's evolving regulatory environment and increasing defense budgets have created favorable conditions for defense mergers.

Mergers and Acquisitions in the Aerospace and Defense Market in the Middle East & Africa

The Middle East and African region presents unique opportunities in the aerospace and defense M&A landscape, driven by ambitious modernization programs and an increasing focus on developing indigenous capabilities. The market is characterized by significant investments in aviation infrastructure and defense modernization, particularly in Gulf Cooperation Council (GCC) countries. The region's strategic position and growing emphasis on diversifying economies beyond traditional sectors have created favorable conditions for M&A activities. Countries are actively pursuing partnerships and acquisitions to enhance their technological capabilities and develop local aerospace and defense industries. The market has witnessed increased interest in areas such as maintenance, repair, and overhaul (MRO) facilities, defense electronics, and unmanned systems. The growing focus on localization of manufacturing and maintenance capabilities has created opportunities for strategic acquisitions and joint ventures.