Metals deals insights: 2021 outlook

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Executive summary

2020 has undoubtedly been upended by Covid-19, and its disruption has touched nearly every facet of life. M&A markets were no exception, and deal activity in the metals sector dampened in H1-20.  Amidst this global uncertainty, some companies and firms have proven resilient, and Q3-20 has already shown signs of fairly dramatic M&A recovery, as deals that were either delayed or postponed from Q2-20 were restarted, jumpstarting new deal activity. While Metals deal value and volume also saw increases from Q2-20 to Q3-20, the industry may have a longer road to recovery relative to other sectors.

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Challenges and opportunities for deals in 2021

PwC's Deals Sector Leader John Potter discusses the trends driving deals and outlook for 2021.

PwC's Deals Sector Leader John Potter discusses the trends driving deals and outlook for 2021. Explore national deals trends


Metals deals outlook

Despite the resurgence in deals activity in Q3-20, much of the uncertainty prompted by Covid-19 persists into Q4 and 2021. As some major European countries impose lockdowns and COVID-19 cases in the US rise, vaccine trials and treatments are gaining momentum and promise. Given the conflicting developments, the question of how long the pandemic will last still remains unanswered. Deal makers will also have to contend with uncertainty surrounding a new president and administration and the potential for policy change.  Even with this uncertainty, we anticipate M&A activity in the metals industry to continue to recover from the lows in the first half of 2020.  However, while the industry as a whole may begin to recover, there is the potential for clear winners to emerge, and other players in the industry to suffer based on their ability -- or lack thereof -- to take advantage of opportunities as they present themselves and adapt to the evolving economic landscape.


“The world faced unforeseen challenges and uncertainty in 2020, and the metals industry was no exception. The M&A decisions businesses make now, and into 2021, can determine their trajectory far into a post-pandemic landscape.”

Brian Kelly, US Metals Deals Leader

Key deal drivers

Shifting industry paths

The Covid-19 pandemic has not impacted all industries equally. While certain industries and companies experienced a severe negative impact, others saw only moderate impacts. Some even thrived during the pandemic. The metals industry was negatively impacted from the pandemic as many downstream users of materials in the automotive, aerospace, and heavy equipment industries saw decreased demand. As some struggling companies may look to shed non-core assets, reduce debt loads, and streamline operations, others with healthy balance sheets and access to capital can be expected to make opportunistic buys and further integrate their supply chains leading to increased M&A activity. The decisions metals firms make now and into 2021, may determine their recovery timeline and/or success far into a post-pandemic world as demand ultimately rebounds.

Potential policy changes

The anticipated changeover of the US Presidential administration ushers in the potential for new policymaking and the reversal of current policy. The metals sector was acutely aware of policy changes in the last four years, as industry players adapted to shifting tariffs on steel and aluminum and the enactment of new trade policies between foreign counterparties. How the Biden administration will use tariffs and revisit trade policy likely will weigh heavily on the minds of leaders in the metals sector as we wade into 2021. Though US companies may be anticipating higher corporate tax rates in the future, firms in the metals sector may benefit from the adoption of policies that are aimed at promoting domestic manufacturing and the overhaul of aging infrastructure. 

Contact us

Brian Kelly

Metals Deals Leader, PwC US

Michael Tomera

US TAS Market Leader, Midwest Market, PwC US

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