Forging ahead: Fourth-quarter 2015 metals industry mergers and acquisitions analysis

February 2016

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Forging ahead: Fourth-quarter 2015 metals industry mergers and acquisitions analysis

Deal value almost doubled in 2015 compared to the previous year, driven mainly by a $31.6 billion third-quarter megadeal. While, activity picks up with a 7.8 percent increase in volume over the same period.

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Forging ahead is PwC's quarterly analysis of merger and acquisition (M&A) activity in the global metals industry. It provides an overview of the most recent M&A results and our expectations for future deal activity.

Highlights of what this quarter's analysis revealed:

  • Deal value almost doubled in 2015, driven mainly by a $31.6 billion third-quarter megadeal. Absent this deal, deal value for the sector would have declined by 4.3 percent, compared to 2014
  • On the other hand, deal volume increased 7.8 percent during the same period, from 90 deals in 2014 to 97 in 2015
  • Fourth quarter of 2015 saw a decline of almost 28 percent in volume and 45 percent in value, as overcapacity and low commodity prices continued to take their toll on metal producers’ margins
  • Average deal values also declined in 4Q15 both sequentially (with a more than a fivefold decrease from $1.6 billion to $238.2 million) and year-over-year (with a 31 percent decline from $312.3 million in 4Q14)
  • Diminishing cash flow in the sector have negatively impacted the profitability of firms
  • US production continues to remain weak despite firm demand: the domestic scenario remains strong, but is strongly counteracted by a weak Chinese economy

Download the analysis to review all the key trends from 4Q15.

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