First-quarter 2012 Forging ahead report: global metals industry mergers and acquisitions analysis

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In the report, you'll find:

  • an overview of M&A results;
  • significant drivers of these results; and
  • expectations of deal activity in future quarters.

Deal value increased substantially during the first quarter of 2012 in the wake of increased activity for mega-deals, valued at $1 billion or more. Mega-deals comprised more than 68% of the total for all deals valued at $50 million or more. The increase occurred despite the general decline in commodity prices. Deal volume was consistent with the latter half of 2011.

Divestitures represented more than 58% of activity, and internal reorganizations increased. These trends indicate the importance of trimming nonperforming assets to boost earnings, as metals companies right-size and increase shareholder returns.

Metals prices could remain volatile, given changing global demand and high energy prices. M&A totals could grow in the rest of 2012 despite these trends, driven by strategic cash levels and the desire to restructure metal industries in several emerging markets.