While global M&A activity in the Metals industry continues to fall, the average deal size appears to be increasing. Although the industry has not seen any major transformations this year, an increase in average deal size indicates a trend away from the mainstream and into more diversified metal manufacturing.
Of the $11.1 billion in transaction value in Q3 2016, 51% was directed towards Steel and 47% towards the Other Metals category. The Iron Ore category also continued to contribute to deal activity, albeit at a lower value per transaction.
The majority of M&A transactions in the Metals industry continued to occur within country borders due to the high cost of transportation of heavy metal products. Over the past three years, 75% of deal activity has occurred locally.
The Asia & Oceania market continues to show a steady pace of consolidation, accounting for 68% of the overall deal volume this quarter. The largest deal in Q3 2016 was between two steel manufacturers in China.
Whereas M&A activity three years ago was led by industry participants, a balancing of strategic and financial participation appears to reflect growing external interest in the Metals sector. This quarter, financial investors accounted for almost half of the activity in the sector.
For our full report and additional information on the Top 10 Deals announced for the year, our regional and subsector analyses, and the Outlook for this sector, please remember to download our:
Global Metals M&A Deals Insights: Q3 2016 update.