CORPORATE transactions in mining and metals were expected to increase in 2018 as companies adopted investment-led strategies, but “transformational consolidation” across the industry was unlikely, said EY.
Reporting its Mergers, acquisitions and capital raising in the mining and metals sector, a quarterly report, the consultancy said deal value rose 15% to $51bn in 2017 – the highest value of completed deals since 2013.
“In 2017, mining and metals companies came to an inflection point as financial distress abated and the sector began to cautiously move toward a more strategic mindset,” said Lee Downham, EY Global Mining & Metals Transactions Leader. But an interest in retaining capital discipline would limit the amount of industry consolidation, he said.
Coal and steel were the primary drivers of deal value in 2017, with coal acquisitions up 156% on 2016 to $8.5bn, and steel transactions doubling in value to $13.3bn. Meanwhile, gold deals declined, falling 34% in value to $7.3bn, it said.
