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.
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
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.”
Metals Deals Leader, PwC US
US TAS Market Leader, Midwest Market, PwC US