Global metals deals insights: Year-end 2018

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Executive summary

Led by three megadeals, 2018 was a big year for M&A in the metals space, with total deal value of $53.4 billion, compared to $28.1 billion in 2017. While these megadeals drove increased average deal size, the various tariffs imposed on and impacting steel and aluminium (and other downstream products) may have negatively impacted M&A momentum. This may be evidenced by overall deal volume declining in 2018 and favoring within-border transactions compared to 2017. While likely only temporary, the uncertainty caused by the heated geopolitical climate may impact M&A into 2019.

Key trends/highlights

  • Deal value in 2018 was $53.4 billion, a 90% increase from 2017, which was primarily driven by three megadeals. Deal value in Q4 2018 declined by 70% versus Q3 2018 to $5 billion.
  • Average deal size in 2018 was $160.5 million, a 113% growth from 2017. However, given the absence of any megadeals in the quarter, average deal size in Q4 2018 was $69 million, a 62% decrease from Q3 2018.
  • 68% of deal value involved an acquirer within the Asia and Oceania region, contributing 56% of the deal volume this year. Steel remained the dominant sub-sector with 51% of the deal value.

“Recent talks between the United States and China aimed at easing trade tensions and the impending ratification of the United States-Mexico-Canada Agreement may trigger some optimism and encourage metals companies to aim for sustained growth through acquisitions, joint ventures and strategic partnerships which were less plausible in 2018.”

Brian Kelly, US Metals Deals Leader

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Brian Kelly

Metals Deals Leader, PwC US

Tel: +1 (216) 875 3121

Michael Tomera

US TAS Market Leader, Midwest Market, PwC US

Tel: +1 (412) 355 6095

Jock O´Callaghan

Global Metals Leader, PwC US

Tel: +61 (3) 8603 6137

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