The blistering pace of mining M&A grinds to a halt after the half-year mark; slowdown likely temporary as China is well positioned to make opportunistic buys and lead a rebound in global M&A.
In the first half (1H) 2011, there were 1,379 deals announced worth US $71 billion, making it the busiest half year of M&A in the mining sector’s history. On an annualized basis, deal volumes and aggregate values were 24% and 2% higher than 2010, and 122% and 32% higher than 2009. Average deal values during 1H 2011 were $104 million – 40% higher than 2010. For the remainder of 2011, however, jittery global equity markets will likely put downward pressure on most mining company valuation for the near term.
“For the time being, politics have taken commodity markets hostage. Although a drop off in deal-making is expected, it will not cease altogether as China’s demand for metals continues to drive long-term fundamentals in the mining M&A market,” says Tim Goldsmith, Global Mining Leader, PwC.
PwC doesn’t believe this is the end of an era of unprecedented global mining M&A. Find out why and read the full report.