Mining M&A deals slow down in second half of 2011

On an annualised basis, deal volumes and aggregate values were 24 per cent and 2 per cent higher than the whole of 2010.

From January-June this year, there was 122 per cent and 32 per cent surge in deal volumes and values over the same period in 2009.

However, transactions have slowed considerably since July this year amid the deepening crisis in the European region and the US.

The report said, however, that deal values plunged by 32 per cent and volumes fell by 19 per cent in July from the previous month. They declined further by 25 per cent and 7 per cent respectively in August.

For the remainder of 2011, jittery global equity markets will likely put downward pressure on most mining company valuations for the near term, it added.

?€œFor the time being, politics have taken commodity markets hostage. Although a drop off in deal-making is expected, it will not cease altogether as China?€™s demand for metals continues to drive long-term fundamentals in the mining M&A market,?€ PwC National Leader (Transaction Services) Mr John Nyholt said.

The report pointed out that this is not ?€œthe end of an era of unprecedented global mining MA Chinese demand supported by other emerging nations, is the most critical factor in formulating the commodity market and, therefore, mining MA expectations.?€

The report said that deals involving steel making metals and minerals made up over 30 per cent of the transactions in the first half of the year - mainly in metallurgical coal, iron ore and niobium, a specialty metal used to harden steel.

Coal topped gold as the most targeted resource by aggregate deal value. It further said that US firms accounted for 31 per cent of the deals by value, while Canada made up 19 per cent of the overall transactions.

Authors: mining - Yahoo! News Search Results

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