Mining, metals sector set for M&A boom

by Steve Randall10 Feb 2016
Mining, metals sector set for M&A boom
The year ahead is predicted to see a surge in M&A activity in the mining and metals sector according to business services firm EY. Its outlook for the industry highlights five years of decline in both volume and values of deals but says that increasing levels of financial distress will mean more divestments, spin-offs, joint ventures and possibly hostile takeover bids.
In 2015 there were just 358 deals completed in the mining and metals sector, the lowest level since 2000. Excluding the US$8.7b BHP Billiton demerger of South32, overall deal value globally dropped to US$40.0b, with a strong bias to domestic deals and assets in developed markets.
For 2016, EY expects more deals to involve private capital; spin-offs to be high on the strategic agenda; deals being driven by the need to de-risk and preserve capital; and hostile bids for low-cost assets in stable jurisdictions.
 
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