Johannesburg, South Africa — MININGREVIEW.COM — 27 November 2009 – Deal activity in the global mining industry has improved only slightly in 2009, according to the PricewaterhouseCoopers (PwC) quarterly analysis of mergers and acquisitions.
Revealing this here, the report added that the deal sizes had also remained very small in the capital constrained environment in which the world was currently operating.
It said that in the third quarter of 2009, there had been 20 announced deals worth more than US$50 million (R375.million), representing a small increase over the 18 deals announced in the first quarter and 16 in the second quarter. However, the overall pace of deal activity as measured by deal value had slowed throughout the course of 2009.
“Strategic investors continue to dominate the deal landscape for the global metals industry, accounting for 98% of deal value announced during the first three quarters of 2009,” said PricewaterhouseCoopers global metals leader Jim Forbes.
“Given that credit constraints would continue to limit the ability of financial sponsors to execute deals, and that strategic acquirers remain pressured to consolidate and build scale to improve margins, the pre-eminence of strategic over financial acquirers is expected to continue,” he added.
The survey showed there had been19 large deals announced in 2008 compared to only five during the first three quarters of 2009.