Metals deal activity is bouncing back strongly and momentum will remain upward in the year ahead, according to ‘Forging Ahead’, PwC’s annual review of M&A activity in the metals sector. The value of international metals deals has broken away from the lows reached in the economic downturn and is now on its way back to the level recorded at the end of the 2006–08 M&A boom.
The report highlights a threefold increase in international cross-border deals, which are up 46% year on year, with deals worth USD 14.3B total by the end of 2010 compared with a low of USD 4.4B in 2009. PwC anticipates that current and future deal flow will keep these totals on course to move back towards the USD 38B recorded at the end of the 2006–08 M&A boom. Total metals sector M&A is also moving up strongly.
The marked increase in international deals is being led by moves to secure raw materials supply – two of the top three metals deals completed in 2010 were for iron ore resources – and to gain a greater presence in fast growth markets.