The FINANCIAL — There were fewer deals but higher deal value in the global mining and metals sector during Q3 2014, amid signs of transactions momentum building, according to EY.
EY’s quarterly analysis shows 119 deals completed in Q3 2014 with total deal value of US$16.2b. Deal volume was down 17% but total deal value was up 51% on Q2 2014, largely due to the completion of Glencore’s US$7.0b divestment of Las Bambas.
“Mining and metals transactions activity is in something of a holding pattern. Deal pipelines are still very strong but are moving slowly,” EY Global Mining & Metals Transactions Leader, Lee Downham, said.
“As has been the case through most of this year, we are seeing signs of momentum slowly building but there is little urgency to complete deals quickly,” he said.
“We are starting to see more strategic acquisitions take place again, particularly amongst mid-tier companies, and there has been some renewed interest in deals in frontier regions, particularly in the gold and copper space while valuations are low.”
The 83 mining and metals sector respondents to EY’s latest Capital Confidence Barometer also points to increasing M&A activity, with 46% expecting to pursue an acquisition in the next 12 months, nearly double that six months ago and the highest level in two years.
The Barometer shows mining and metals companies are also confident in key deal metrics, including the likelihood of closing acquisitions (60%, up from 26% six months ago); the quality of acquisition opportunities (60%, up from 34%), and; the number of acquisition opportunities (67%, up from 42%), according to EY.
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