Mergers & acquisitions activity in the mining industry
In 2009 mining M&A saw significant decreases in values and also changes in the characteristics of buyers and sellers. Sellers were acting largely through necessity to strengthen balance sheets for survival rather than seeking expansion and development capital according to ‘Mining Deals’, PwC’s annual publication on deal activity in the mining sector.
Mining deals certainly felt the impact of the global economic downturn with significantly lower deal values driven by lower asset prices and an absence of ‘mega deals’ resulted in the total value of mining M&A activity halving from 2008 levels. While the number of deals increased by 16%, the average deal value plummeted from US$124m in 2008 to US$52m in 2009 as smaller deals were done to deleverage balance sheets.
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