Metals deal activity is bouncing back strongly, says the review
India gears to become the 2nd largest producer of steel by 2015 from the current position, according to ‘Forging Ahead’, PwC’s annual review of M&A activity in the metals sector. Metals deal activity is bouncing back strongly and momentum will remain upward in the year ahead, according to ‘Forging Ahead’, PwC’s annual review of M&A activity in the metals sector. The value of international metals deals has broken away from the lows reached in the economic downturn and is now on its way back to the level recorded at the end of the 2006-08 M&A boom.
The report highlights:
A threefold increase in international cross-border deals, which are up 46% year on year.
A $US14.3bn total by the end of 2010 compared with a low of US$4.4bn in 2009.
PwC anticipates that current and future deal flow will keep these totals on course to move back towards the US$38bn recorded at the end of the 2006-08 M&A boom.
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Total metals sector M&A is also moving up strongly – up 79% to US$27bn from £15.1bn the year before.
The marked increase in international deals is being led by moves to secure raw materials supply – two of the top three metals deals completed in 2010 were for iron ore resources - and to gain a greater presence in fast growth markets. Tapan Ray, Leader – Metals, PwC India said: “India with economic growth around nine percent year-on-year continues to be a large market domestically and remains relatively less affected by the global financial crisis. As a result, we are seeing predictable capacity expansions in the sector. Unlike the past, sector today isn’t reliant on the developed export markets, as new avenues in the Latin Americas and Africa have opened up internationally, coupled with the buoyant domestic demand."
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