M&A to Fall Short of 2007 Levels, Says PricewaterhouseCoopers
Metals
The pace of deal activity in the global metals industry slowed in the first quarter of 2008 amidst concerns of industry consolidation and a tightened credit market, according to Forging Ahead: Global Mergers and Acquisitions Analysis. A total of 31 deals (disclosed value at or above $50 million) were announced in Q1 2008 accounting for $20.9 billion in total deal value. The volume of deals is on pace to exceed 2006 levels but lags the number of transactions seen in 2007. The slowdown in total deal value was primarily driven by the absence of deals worth at least $10 billion. Last year, total deal values in the global metals industry totaled $295.5 billion, and in 2006, the total deal value was $186.7 billion. Consistent with previous quarters, firms in Asia and Oceania served as the leading targets as measured by number of deals, accounting for 42 percent of all deal targets. However, North American companies also remained attractive acquisition targets, accounting for the greatest total deal value of all regions (42 percent) and representing the second-highest number of deal targets (26 percent) in the first quarter of 2008. The level of interest in North American targets by foreign investors will likely remain strong due to strong metals prices, increased demand, and the weak U.S. dollar which makes cross-border transactions of U.S. targets less expensive.