The deal-of-the-year was the announced $54 billion blockbuster merger between Switzerland-based Glencore International plc and United Kingdom-based Xstrata plc to form one of the world’s largest diversified miners.
While “Glenstrata” dominated news headlines, 2012 was not a one-hit wonder for M&A activity. Copper was the most sought-after metal when measured by deal value in 2012. However, copper couldn’t outpace gold in terms M&A deal volume. While 2012 didn’t yield any blockbuster gold deals, the mining community did witness plenty of interest in the gold space.
We don’t expect to see mega-mergers in 2013. With a rash of write-downs in 2012 related to significant acquisitions completed in prior years, shareholders are wary, not willing to stomach the risks associated with mega-mergers.
Companies with financial constraints have been forced to get creative when it comes to raising money to fund acquisitions or advance projects. We anticipate the need for creativity to continue well into 2013. Equity investors are still content to sit on the sidelines until a marked improvements in the markets appears.
You can download our report on the 2012 analysis of M&A activities in the mining sector and the outlook for 2013