Forging Ahead: Global Metals Deals 2014 outlook and 2013 review

We open our latest Forging Ahead report with a discussion of the outlook for the year ahead and identify some of the main themes we expect to be at work. Deal activity fell away in 2013 and, while there is some greater economic optimism, we conclude that overall low gear growth combined with continued worldwide production overcapacity doesn’t augur well for a strong recovery in metals M&A in 2014.

Looking ahead, we expect to see companies maintaining an inward focus on efficiencies rather than an outward focus on targets. But there will be a continued flow of deals arising from restructuring moves and a number of other themes that we examine in the report. We also see prospects for a geographical rebalancing of metals M&A activity. This has shifted eastward to Asia Pacific in the last two years. Now, with momentum for economic growth coming from the US, driven in part by cheaper energy, we expect to see this reflected in greater North American deal flow.

In 2013, international deals plummet as double-dip is confirmed
Deal numbers fell 30% year on year in a deep double-dip to below the volume recorded in the post-credit crunch year of 2009. Total deal value fell 24% year on year but the depth of the value double-dip was not as pronounced as the volume double-dip. The total 2013 metals deal value of US$34.8bn was much higher than the US$15.1bn low in 2009.

2014 deal outlook: a low gear for metals deal making
Looking ahead, we expect to see companies maintaining an inward focus on efficiencies rather than an outward focus on targets. But there will be a continued flow of deals arising from restructuring moves and a number of other themes that we examine in the report. We also see prospects for a geographical rebalancing of metals M&A activity. This has shifted eastward to Asia Pacific in the last two years. Now, with momentum for economic growth coming from the US, driven in part by cheaper energy, we expect to see this reflected in greater North American deal flow.