WASHINGTON ― The global aerospace and defense industry experienced a record year in 2017 due to the large number of mergers and acquisitions, according to a report by PwC.

The value of deals from last year totals more than $72 billion, surpassing the previous $67 billion record set in 2015, the report said.

United Technologies Corporation’s acquisition of Rockwell Collins in September for $30 billion is the second-largest transaction in industry history. There were three other “Megadeals” ($5 billion-plus) in 2017: Northrop Grumman’s $9 billion acquisition of Orbital ATK; Safran’s $8 billion acquisition of Zodiac Aerospace; and Thales’ $5 billion acquisition of Gemalto.

While the total number of deals in 2017 was the same in 2016 ― 454 in total ― the average deal size increased 69 percent from 2016 levels, averaging $411 million in 2017, PwC said.

The report attributes strong activity in the defense industry to geopolitical tensions, a growing emphasis on missile defense in light of an emerging North Korean threat and the Trump administration’s push for increased defense budgets. Other catalysts include plans by contractors to invest in emerging technologies that will play a crucial role in the Defense Department’s Third Offset Strategy, which includes autonomy, artificial intelligence, robotics and cyber.

Regional trends remained consistent with previous years’ activity, with North America remaining the most active acquirer, with the U.S. accounting for 32 percent of targets. The U.K. and Eurozone as well as the Asia and Oceania zones were the next most active regions, despite Europe’s contribution as an acquirer dropping 20 percent for the year. The report attributes this drop to the region’s “more diplomatic stance to a changing geopolitical landscape.”

Looking forward to 2018, the report predicts recent tax reform could impact deal values and volume as “increased liquidity becomes available to fund inorganic growth agendas.”