Forging Ahead

First-quarter 2010 global metals industry M&A analysis

Making smarter deals in a changing environment: Due diligence

As the metals industry emerges from the economic recession, the short-term focus will be on organic growth and capital investments. But in the next six to 12 months, the industry will likely turn its attention to mergers and acquisitions (M&A) and how cautious lenders will affect companies’ ability to finance future deals.

Unlike past economic downturns when metals companies emerged with strong balance sheets and robust cash reserves, today metals companies looking to make an acquisition as a way to stimulate growth will need to rely on lenders and capital markets. And the lenders and markets see risk and uncertainty in a host of evolving issues, including raw materials pricing changes, healthcare reform, climate change, and pension plan funding.