Mega metal deals grind down in 2013 as bite size deals take off, says PwC
All eyes in the metal industry will be on the lookout for a silver lining in the uncertain economic horizon this year as a PwC report out today predicts. Mega deals will dwindle against a surge in smaller announcements according to Forging Ahead, with CEOs holding onto their purse strings. In PwC’s annual in-depth metals M&A review and forecast, the headline trend is for a continuing recovery from a post credit-crunch low with Asia being the ‘star’ region dominating the 2012 deals market. It accounted for 68% of totals deals value, more than three times the 19% share it held in 2011. Jim Forbes, global metals leader, PwC, said: “There is no doubt that the industry is facing some of its toughest challenges yet as companies battle the headwinds of ongoing economic uncertainty and unpredictable costs around raw materials and energy. On the surface, we are still seeing some mega-deals but they are fewer and if we created a top 10 of the deals announced and completed in 2012 just half would have been valued above US$1 bn. “We also found through our analysis that the metals sector has experienced a ‘double dip’ downturn in M&A activity with deal numbers outside the Asia Pacific region falling back down to the post-credit crunch low of 2009.” Deal values and breakdowns In 2012 there were 507 deals against 2011’s 531, still significantly above the highest pre-credit crunch volume of 411 in 2007. Deal value for 2012 is also 203.5% higher than the US$15.1bn deal value total of 2009. Completed deal value in the sector was up 20% year on year, rising from US$38.2bn in 2011 to US$45.8bn in 2012. However, the totals for 2012, mask a vast geographic imbalance, said Jim Forbes, PwC’s global metals leader as the Asia Pacific region accounts […]